Ahh the sweet smell of recovery! It’s “official Bernanke said so and so did MSNBC. I don’t think we are anywhere close to being out of the woods yet. To many shoes still dropping. Mortgage Resets, Commercial Real Estate, the number of banks failing each month, and the U.S. Dollar; just to name a few. Oops, can’t forget Inflation, oops hyper-inflation. Hey, we haven’t even gotten to the world political climate; i.e. Iran, N. Korea, Israel, and Afghanistan; to name a few more. Where are the contrarians? What happened to astute investing? When is Geitner going to turn off the printing press? When is China going to fire back in the trade war and just say no to one of the next treasury auctions? If that happened for 1-2 auctions how do you think the market will react? Personally, I think we are dead in the eye of the hurricane of economic malestrom. I remember reading early this year this is the exact blueprint of the Bilderberger Plan, allow the stock market to get to pre-crash levels, suck in all the investors back into the market and then pull the plug. I am not wearing a tin foil hat either… research this out for yourself (Google Bilderberger’s and another good source is Alex Jones Infowar site.) I also find it very interesting no news from the latest G-20 meeting. Plus the BRIC countries are very silent, can you imagine if China convinced those countries to side with them in a trade war? Don’t get me wrong I want to be out of the recession too. However, when everyone is saying Buy, it is usually the time to Sell. I think the DJI still has more room 9750 is the first major resistance, next 9850, and then no man’s land at 10,000 and above. I don’t think we will quite get there (DJI 10,000), but since we are in the head building phase of the head and shoulders formation on the charts it could conceivably happen. So since there are some good stocks still out there, due due diligence, keep your stops tight within 10-18%. I know I would rather take 60-80% off the table in profits than ride the elevator back down.

Gold for the 3rd day has held above $1000, it doesn’t surprise me. Okay we now have support at $998-$1000 for gold. The first resistance is te $1011 double top, when that falls, next stop $1020, and then the assault on the all time high of $1033. Silver already is at it’s high for the year and the sky is the limit. First of all with the euphoria over the “recession is over gang” will mean a perceived and partially real rnewed industrial demand for both Silver and Copper too.. However, when Gold takes out it’s all time high, I think there will be a massive influx of money into Silver the “Poor Man’s Gold”. Silver at $25oz before the end of the year and Gold at $1250- $1325. I have been accumulating both and also own the core major Silver and Gold producers. I have have mid-tier and junior producers and a few good ‘explorer’s too! This is not to “toot my horn”, but to implore you to join me. Get in now, and hang on for the ride of your life! Great Investing! – jschulmansr

NO SPEED BUMPS IN SIGHT?
This rally has only modest volume (although more today) and positive major news remains thin but always “better than expected” (Retail Sales and Empire State Manufacturing Survey). But, hey, Bernanke postulates that the recession is “likely over.” Now, who the hell knew that?! Geithner was more equivocal in his comments saying a “true recovery still has a ways to go.” Well, okay, let’s just say things are better than before.

Volume increased on an up day for a change but some of this is misleading given one glance at the late day trading on the 5 minute SPY chart. Breadth however was positive but not overwhelmingly so.

click to enlarge

“Today is the last trading day for VIX SEPT options, with the cash settlement price disseminated tomorrow morning off the CBOE SPX option volatility calculation. The open interest in the SEPT 25 puts is a staggering 188k, watch for the underlying to lift higher and migrate to this strike during the course of the trading session. Dealers are long this strike due to a series of put butterflies (SEPT 22.5,25,27.5) purchased by customers the past 10 days.” This per our friend, Scott Larison, Managing Director, Options Sales and Strategy, Forefront Advisory in New York.

Retail Sales were “better than expected” causing true believers in Chucky, the Consumer you can’t kill, to go on another shopping spree. You were out there shopping right?

We have quad-witching ahead and some of today’s action is no doubt linked to getting out of the way and manipulation with options and futures. This evening expiring September S&P futures are down a lot with rollover to December no doubt occurring. These are the types of the things that HAL 9000s live on.

There’s plenty of momentum for bulls and there are times this does seem unstoppable. Funny thing, sometimes this is just when things get upended.

One thing markets like is Washington gridlock and the most overexposed president in history is helping with it. He might do a little better if he gave us and his teleprompter a break. That’s just my opinion.

The charts and comments are only the author’s view of market activity and aren’t recommendations to buy or sell any security. Market sectors and related ETFs are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period. Chart annotations aren’t predictive of any future market action rather they only demonstrate the author’s opinion as to a range of possibilities going forward. More detailed information, including actionable alerts, are available to subscribers at www.etfdigest.com.

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– Trend Analysis Revealed –

Substantial moves like the ones that we have recently witnessed present opportunities to succeed or fail in the markets. Traders who stayed on the correct side of the trend were rewarded substantially.

Serious questions effecting your portfolio still remain:

– Have we seen the Indexes bottom or top?
– Is a reversal in the near future?
– Is it too late to go short?

Stay on the correct side of the market. Let our Trade Triangle technology work for you. It’s free, It’s informative, It’s on the money.

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. – jschulmansr

It’s Jiffy Pop Time and the Gold market is just starting to pop, pop, pop. The heat is being generated by the whirring printing presses at the U.S. Treasury; which are running full steam ahead, unabated, and with no prospect of turning them off. This forms the stove with Inflation, (soon to be Hyper-Inflation) are the burners, blazing red hot. Extra energy is coming from the falling dollar and rising prices/Inflation regardless of what the manipulated Government reports may say. True Inflation right now is approximately 18%+. The tin foil on the Jiffy Pop is starting to rise and Gold has closed today at an 18 month high. We are moving out of the deflation stage and into the inflation stage, if Bernanke is truly dedicated to saving the U.S. economy the he need to tell Geitner to turn off the presses now. We have already doubled, no almost tripled the amount of dollars in circulation now; just in the last 8 months.

The popping is growing louder and mmm- the smell of fresh popped Jiffy Pop Popcorn. The heat is high and I hope you are on the right side of the markets- especially Gold and Precious Metals and in Stocks. For Gold in the coming week I fully expect we will take out the $1033 high. I would not be upset if we built a base down here around $1000 – $1015 during the next few days and closing out next week at $1025 – $1040. This thrust will take us up to $1075- $1100 Then a retracement to back to $1025-$1033 before taking out $1100; and then getting to $1250 – $1300 by the end of the year. We will see a futile attempt to prop up the U.S. Dollar but there is nothing they can do short of raising Interest rates which will sink the fledgling recovery. Oil wil come back and take out first $75 a barrel and then $100 a barrel by the end of the year.

On stocks, I made a mistake on the wave/formation pattern, I still feel we are in the process of creating a head and shoulders top, the exception is that we are still forming the head. I think we will top out the head at DJI 9750- 9800. From there it will be a vicious drop off the cliff preceded by a short right shoulder buildup. I think the big crash is going to occur very soon in the next few weeks. Keep your stops very tight and get ready to play the downside.

I initiated two positions Thurs late afternoon, I bought (DGP) at 2245 and I sold (DGZ) at $22.60. I am getting ready to buy Dec call options for (GLD) and (RGLD) on Monday. You can follow my trades on twitter right after I initiate them.

Gold may have moved too high too soon . . . but whether or not the metal manages to recoup and hold onto recent gains near or above the $1000 an ounce level in the days immediately ahead . . . we are nevertheless looking for new highs (above $1032) in the closing months of the year with gold possibly at $1200 or $1300 before the New Year.

Key One: India

I’ve just returned from India, one of the most crucial markets for gold with a long history and big appetite for the yellow metal. What happens next for gold may depend most on the strength — or weakness — of Indian buying. And, Indian buying is both price sensitive and in sync with various holidays, festivals, and the wedding seasons.

With current rupee-denominated prices near historic highs, many are waiting either for a correction or evidence of staying power before returning to the market for new purchases. And while festival and wedding-related buying is expected later this month, the two-week period up to September 19th is considered inauspicious for gold purchases and many potential buyers will wait until later in the month.

If gold can remain near $1000 for the next week or two, giving Indians a sense of confidence that the price is not about to retreat, we can imagine stronger buying interest sufficient to get the price moving toward its previous historic peak and beyond into uncharted territory.

Key Two: China

Official — but unreported — buying on behalf of the central bank and possibly the country’s sovereign wealth fund, the China Investment Corporation, is being joined by growing private-sector demand for both investment bars and jewelry.

Press reports suggest that the Chinese government has adopted a new — more positive — attitude toward private-sector buying of both gold and silver. With China now the number one gold-mining country, it is in their interest to see a higher gold price as long as demand can be satisfied by domestic mine production and scrap reflows. Additionally, it has been suggested that the new pro-gold policy is intended to channel speculative funds away from real estate and equity investments.

The recently announced agreement for the People’s Bank of China to purchase from the International Monetary Fund about $50 billion in SDR-denominated, IMF-issued interest-bearing securities has also contributed to the latest round of dollar selling . . . and, to the extent that dollar weakness is a plus for gold, this has also supported the early September gold rally.

Key Three: Barrick

Barrick Gold’s (ABX) smart move to buy back its gold hedge position provided a temporary booster shot that helped propel the yellow metal through the $1000 an ounce barrier.

If I remember correctly, as of midyear, Barrick — the world’s largest gold-mine producer — had about 168 tons of gold outstanding on its hedge book . . . and would have to buy back this quantity to regain full exposure to future gold-price moves.

Anticipating an announcement effect, Barrick most likely accelerated its gold repurchase program in the days leading up to the September 7th announcement and probably paused to let the market recover from the news and prices to back off a bit before it resumes its repurchase program. With another tranche still to be repurchased in the months ahead, I expect Barrick to buy into price weakness, helping to underpin the price at moments of weakness.

Key Four: Monetary Factors

Of course, clients and readers of NicholsOnGold know that we think U.S. monetary policy and money supply growth are the primary determinants of U.S. price inflation, U.S. dollar performance, and the future price of gold. Last weekend’s communique from the G20 Finance Ministers and Central Bank Governors was a reminder that monetary stimulus is likely to stay for some time. This — along with last week’s report from the United Nations critical of the U.S. dollar’s roll as a global reserve asset — has pushed the dollar lower in foreign-exchange markets to the benefit of gold.

How to trade hot commodities like natural gas, oil and gold? We should see big moves in the coming weeks as gas bottoms, and oil and gold breakout or breakdown. A lot of money is going to be exchanging hands quickly and the key is to be on the receiving end of things. Below are some charts showing where these commodities are trading.

How to Trade Gold – Weekly Chart

How I trade gold is relatively straight forward. I use a simple trading model which allows me to identify the down side risk for a potential gold trade. I also use the same model for trading oil, gas and silver.

Beyond finding good entry points, it is crucial to know when to take some profits off the table. The weekly gold chart clearly shows gold trading at a resistance level which means there are going to be more sellers than buyers, hence the reason it is called resistance.

To trade gold I enter with my low risk entry points and sell half my position once I reach a resistance level. Thursday for example gold moved up into this long term resistance level and then started to head south. We took some profits off the table before gold dipped in the late afternoon for a healthy gain. Taking profits is a must or you’ll simply hold onto winning positions until they eventually turn into a loser.

How to Trade Crude Oil – Weekly Chart

Trading crude oil is exciting because it moves much faster than gold. How to trade crude oil with low risk can be done by using my simple trading model which is a combination of indicators like momentum, support & resistance, volume, price patterns and media coverage. All these things combined allow for highly accurate trades with minimal down side risk.

Crude oil looks ready to make a big move. The odds are pointing to higher prices because oil has a multi month bullish price action and the falling US dollar helps increase the price of oil. I can see oil breakout and rally into the $95 per barrel level if things go that way in the coming weeks.

How to Trade Oil (USO Fund) – Weekly Chart

USO tracks similarly to the price of crude oil and it provides some great trades for both swing traders and day traders. I focus on trades that bounce off support with low downside risks, which occur on both the daily and weekly charts.

How to Trade Natural Gas – Weekly Chart

Natural gas is looking ready to bottom here. If you go back to the early 90’s the $2-3 range is a major support level. While I don’t generally try to pick bottoms, there are some signature price patterns and volume patterns that have proven to be very profitable for catching sharp bounces.

How to Trade Natural Gas – Daily Chart

The daily chart shows a perfect waterfall sell off with the price of natural gas dropping to a long term support level. This pattern combination shows panic selling which indicates a short term bottom is close.

The extreme panic selling and sharp decline in price, removes much of the down side risk. Scaling into a position over a few days, if the price continues to move lower, is important for this strategy to work its magic.

The black horizontal lines show my resistance levels for taking profits. If the price were to drop below $10 then I would exit the second half of the position to lock in the rest of the profit.

How to Trade Commodities Conclusion:

Trading commodities is very simple with all the ETFs and funds available. The energy funds like oil and gas have some issues with following the prices of their underlying commodity but I do not find it a problem with my style of trading.

I would really like to know the entire story about what is going on with the oil and nat gas funds which have crazy contango issues. Why do other commodity funds like GLD (gold bullion) and SLV (silver bullion) not have these issues? Why can’t they make a fund which follows oil and gas properly? All I know is that there are a lot of dishonest people in the financial industry taking honest hard working peoples’ money.

(9-11 Postscript): I salute the fallen hero’s of 9-11 – we will not forget you! Our prayers are still with the families of the fallen and the survivors. We will never forget…

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I will be starting regular daily posts next week especially since the markets are heating up- Like I said it’s “Jiffy Pop” time! – Have a great weekend-jschulmansr

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Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. – jschulmansr

Look at Gold go! I have been telling, no pleading with you to get on board the Gold train for the last 2 months or longer. Hope you hopped aboard. Now Gold is at a key testing point. If we can successfully close above, and hold above $1000 then we definitely will be off to setting a new all time high for Gold. What will happen this time is that we will see a concentrated efforts by the Big 3 Shorts to push Gold down back to at least $950. If that does happen do not be alarmed, Gold will come roaring back. We will see Gold at $1250 to $1325 by the end of the year. I think we are going to take out $1034-36 high and go to $1080 to $1150. Then we will have a retracement back to $1000 to $980. Then we will start leg number 2 and zip up to $1250 with the rally going strong thru December. There is still plenty time to get in and plenty of undervalued Gold and Silver producers. Don’t forget to add some Platinum/Palladium producers as well like (PAL) and (ANO). I will be putting up a portfolio list in the next week of companies I am personally invested in. Also for some quick bang for the buck without the total risk you may want to look at (DGP) an ETF which gives you 2x times the future price gain.

As for stocks we are now forming the right shoulder of the head and shoulders top formation, expect choppy, whipsaw action as the beleagured bulls try to hang on. However they (the Bulls) will run out of energy and the market is getting ready to collapse. A close below 9300 will signal the beginning of the failure. Below 9250 will confirm, and absolute confirmation with a close below 9000. I do think tomorrow (Fri) we have a chance of seeing 9400-9425 and then start a gradual decline accelerating at the end of next week. As always Great Investing! – jschulmansr

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. – jschulmansr

Well the dog days of summer are over and September is blowing in. As the brilliant colors of autumn are starting to bloom with the leaves turning orange, gold and crimson; the leaves are starting to drop. That’s not all that is starting to fall, stocks are beginning their seasonal drop. If you haven’t taken profits please do so. We will see one more push up in stocks as they form the right shoulder of the head and shoulders formation on the chart. We have just finished the head with the right shoulder to follow (DJIA). 9200 (DJIA) is the first support, next roughly 9125-9080. A decisive break below the 50 day moving average or 9000 will be absolute confirmation of the new bear market downtrend. Commercial real estate is one of the next factors (shoe) about to drop. In addition the tax break for buying a new home is about to end, and the auto industry will not have cash for clunkers to fall back on. Late Breaking China has said NO to Credit derivatives and any losses from them. This is definitely not good for the US markets. So get rid of your more speculative stocks move to good yielding stocks in industries that people have to buy the products in good times or bad times. On the rest move your stops very close w/in 10% trailing. Maybe also look at selling covered calls or puts to lock in profits and earn a little income on the side.

Gold and Precious metals are coiled up ready to spring dramatically to the upside. Countdown is almost over, ignition commencing. We have a nice little triangle in Gold. Personally, I feel we will see the breakout to the upside after a little false breakout to the downside. In other words I fell it will go down like this, first we will see Gold test the $930 level as the Big 3 shorts make one more desperate effort to save themselves. However I feel that Gold will hold and climb back to $950 and then break above $965. When that happens the next resistance will be $980, then $1000, and then a 2nd test for the all time high at $1032. I think it will successfully break that level and hit at least $1250 before the end of the year with a potential to actually hit $1325. Keep accumulating companies with a low cost of production, junior and mid tier producers with current or about to start production. There are still many bargains which I will start featuring here on the blog.

I apologize for the recent lack of posts over the past month. Since I lost my day job, I decided to go back to school again so to speak by taking a few intensive trading and technical analysis courses to refresh up again. Since my new job will be trading the markets, I will be sharing my picks and option trades, forex trades, along with choice stock picks. Wishing all of us Great Investing! -jschulmansr

Bullish on gold since it carried a $400-per-ounce price tag, Blue Phoenix Chief Investment Strategist John Licata expects the king of metals to ring in the New Year with a $1,200-per-ounce crown. As he told The Gold Report in April, he still considers gold one of the best asset plays in the world. With recovery on the horizon, he’s also high on silver—in part because a pickup in manufacturing will drive up demand. While he says it’s premature to claim economic recovery, he isn’t looking to copper to serve as the traditional harbinger of a return from recession this time. His rationale? Good economic news—while too inconsistent to make recovery imminent—is already baked in to copper’s climb already this year.

The Gold Report: You weren’t too bullish on seeing a recovery in 2009 when we caught up with you in April. We’ve seen some good Q2 reporting from a variety of companies and some encouraging economic data. The government is starting to claim we’re in recovery. What’s your take on this?

John Licata: I do think we’ve seen some better domestic economic data, but it’s premature to think we’re totally out of the woods. In terms of corporate earnings, a lot of company profits might have surprised to the upside, but they’re still down 50% to 70% from quarters before or the prior year.

Many companies have been trying to compare Q1 and Q2. You’re still not seeing dramatic differences to the upside. Quite frankly, some companies are still living within cash flow and I think that’s one of the reasons why we could have a problem with supply and demand imbalances as we come to the end of 2009 and enter 2010.

Unemployment is likely to keep rising. Although the last numbers were much better than anticipated, I don’t think we’ve seen the green light that will cause people to start hiring again. We could hit 10% unemployment by the end of the year, and that’s going to be a precursor to some weaker retail heading into the holiday season. Net-net, you probably could put the word ‘inconsistent’ toward most of the economic data coming out of the U.S.

The industrial numbers that came out of China a couple of weeks ago [August 10] were actually below expectations as well. While everyone wants to be bullish and the data is somewhat better than many expected, it’s still not great. So I think to claim victory right now is definitely premature.

TGR: You mentioned a supply-demand imbalance. What do you see on that front?

JL: Companies are not putting money back into infrastructure. For that reason, once demand actually starts to increase, supply levels will be shockingly different from what people might expect.

TGR: Are you differentiating between the BRIC countries and North America in that regard?

JL: I’m not just looking at the BRIC countries as the barometer for the economic pulse. I don’t even think China is the saving grace for commodities. But I do think what is going to be indicative for a recovery is to see demand pick up, to start seeing jobs pick up again, more consistently; not just one month out of six. We need to see consistent job growth.

TGR: When do you think demand might pick up?

JL: Q3, perhaps Q4, is when we probably can start seeing demand start picking up and I think that’s when we’re going to start to see overall a global economic recovery. I’m skeptical that it can happen before Q4.

TGR: Is that worldwide demand pickup you’re anticipating?

JL: I’m referring to North America.

TGR: Can demand pick up before unemployment abates?

JL: It can happen before, but I think demand and employment will increase in tandem.

TGR: In our previous conversation, you compared the investment opportunities in oil, natural gas and gold to one another. At this point, which of these three sectors do you think offer the greatest return?

JL: Because of the upside that I think could happen over the next 12 months, I would rate natural gas first, gold second and oil third. For right now, I’m conservatively optimistic on oil. Although short term we might have a pullback, I’m still bullish on the price of oil. I think oil will trade north of $80 by year end, and I think we’ll again see triple-digit oil within the next two years. A lot of major wells in the world are not as productive as they once were and when it comes to demand increasing because the overall economic health around the world is picking up, we could be in trouble in terms of supplies. That relates to the metals as well as energy.

TGR: Speaking of metals, your outlook for gold?

JL: I continue to maintain that we could see $1,200 gold prices by year-end. I think gold is very much on the way to hitting that pretty aggressive price target. The miners themselves seem pretty confident on the upside for gold.

TGR: In April, you described gold as one of the best asset plays in the world and your recommendation to investors was to focus initially on physical gold. Have you changed that viewpoint?

JL: No. I’ve been bullish on gold since it was below $400. But now I am starting to see some opportunities in the equity side of the gold market that are becoming very appealing and I didn’t see that when we last spoke.

TGR: Are you still bullish on platinum and palladium, too?

JL: I am still enthusiastic, but not as bullish on either of them just because we have seen a bit of a run since April. I’d rather be in silver. I think silver gets forgotten when we start talking about precious metals. As opposed to platinum or palladium, I would rather be in the silver space.

TGR: Is there anything in particular in silver that you’re finding appealing?

JL: I just think if we’re talking about an economic recovery in the back half of this year into 2010 and silver is mostly used for industrial purposes, I honestly think that silver prices are just forgotten. When people start talking about the inflation hedge, they jump into gold. If they start talking about the economy improving, they jump into copper. They tend to forget that silver is actually used for much manufacturing. So I think that is the forgotten metal and I do think that silver prices can move a lot higher, especially as gold prices march through $1,000.

TGR: As you say, people look to copper as the leading metal to point to in terms of a recovery. What’s your feeling about copper?

JL: You hit the nail on the head. Everyone starts to talk about copper, but nothing has jumped out at me to say that copper prices have much more upside. Copper prices are up nearly 100% year-to-date, so I think a lot of the recovery that many people are talking about has been priced in already.

The Baltic Dry Index, an index that just had the biggest monthly drop since October (down 28% in August), has been down because people fear that China might cut back on buying iron ore and coal. If that happens, copper prices won’t be immune. Copper supplies have been tight for the last couple of quarters. If anything, we’re trading about 35 cents or 40 cents above the recent 50-day moving average. I think copper is over-extended right now.

TGR: Any last comments before we meet again?

JL: Only that while it’s a difficult marketplace and I do expect tight markets around the world to continue, some of the plays we’ve talked about have the makings of a pretty successful portfolio.

After studying economics and graduating from Saint Peter’s College in New Jersey (where he received the Wall Street Journal Award for economic excellence), John J. Licata set his sights on Wall Street. During his career, John has held both trading and research positions on the NYMEX, Dow Jones, Smith Barney and Brokerage America. Early in 2006, he founded Blue Phoenix, Inc., an independent energy/metals research and consulting firm based in New York City. John, the company’s Chief Investment Strategist, has appeared regularly in the media (CNBC, Bloomberg TV/Radio, Business News Network (BNN), Barron’s, The Wall Street Journal, Chicago Sun, Los Angeles Times, etc.) over the years for his insights/forecasts in the commodity spectrum.

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. – jschulmansr

The timer is ticking and drawing ever closer. The Markets are behaving just like I felt they would be. The (DJI) is making it’s final push while the broader market is starting to lag. We are almost at the top of the head in the head and shoulders pattern for the (DJI). Will it break 10,000? Personally I do not think so. The market rallied today on “funny” unemployment figures released by the government this morning. What happened to the 750,000 unemployed workers which have seemingly vanished? They certainly were not hired on new jobs! Where did they go? Add them back, you now have a more real picture of unemployment. Please keep your stop losses tight and be prepared to be stopped out.

Gold and Precious Metals… Like I said the timer is drawing down to zero. Keep accumulating and add on to your (DGP) positions too. Buy producers and those near production with proven reserves. I still see $1250 by year end for Gold, $25 for Silver and /or better! Buy now! Your Children and Grandchildren will Thank You! Another stock I like is Apollo Gold (AGT), they recently have started production and are ramping up for more. At .45 cents a share you can get a nice position for a small investment. Another “Buy and Forget”. By the way I still also feel Silver will outperform Gold on a percentage basis (see article below).

Have a Great Weekend, I will be resuming regular daily posts as soon as I have finished setting up a couple of new web sites. My other vocation, I am also an Internet Marketer. Remember, set up as many multiple income streams as you can. Good Investing! -jschulmansr

Here is a video analysis of the S&P and Gold markets. The technical analysis was right on at the time, but those markets have changed quite a bit in the last few days. The S&P had a huge rally and Gold is climbing at a steady rate, so what’s the new analysis? Glad you asked!

Below are two free videos, one on Gold and one on the S&P, that gives us an in depth technical look into these markets. Again the videos are free and very informative. Just Click on the Links Below…

Also- Here’s your chance to analyze that stock you have been thinking about adding to your portfolio. Just enter the ticker of any company, name of a commodity, or forex pair and get your complimentary technical analysis. It cost you nothing and no payment info will ever be requested.

ANNANDALE, Va. (MarketWatch) — Corporate insiders have recently been selling their companies’ shares at a greater pace than at any time since the top of the bull market in the fall of 2007.

Does that mean you should immediately start lightening your equity exposure?

It depends on whom you ask.

But, first, the data.

Corporate insiders are a company’s officers, directors and largest shareholders. They are required to report to the SEC whenever they buy or sell shares of their companies, and various research firms collect and analyze those transactions.

One is the Vickers Weekly Insider Report, published by Argus Research. In their latest issue, received Monday afternoon, Vickers reported that the ratio of insider selling to insider buying last week was 4.16-to-1, the highest the ratio has been since October 2007.

I don’t need to remind you that the 2002-2007 bull market topped out that month.

To be sure, the weekly insider data can be volatile, especially during periods like the summer, in which the overall volume of insider transactions can be quite light. That is one of the reasons why Vickers also calculates an eight-week average of the insider sell-to-buy ratio, and it currently stands at 2.69-to-1. That’s the highest that this eight-week ratio has been since November 2007.

To put the insiders’ recent selling into context, consider that in late April, the last time I devoted a column to the behavior of insiders (and when the rally that began on March 9 was still only six weeks old), the comparable eight-week sell-to-buy ratio was just 0.72-to-1. ( Read my April 27 column.)

Why, given this, shouldn’t we be running, not walking, to the exits?

May be you should, of course.

But, in deciding whether to do so, there are several other factors to consider.

The first reason to be at least a little bit skeptical of insiders’ current pessimism is that they, on balance, failed to anticipate the 2007-2009 bear market. On the contrary, as I reported on numerous occasions during that bear market, they were largely bullish throughout. The average recommended equity exposure of Vickers’ two model portfolios, for example, was around 90% from late 2007 through the early part of this year.

What makes insiders more worth listening to now than then?

It’s a fair enough question, of course. What those who are inclined to follow the insiders can say by way of response is that insiders, over the years, have been more right than wrong — even though by no means infallible.

Another reason not to immediately go to cash in response to insiders’ increased recent predisposition to sell their companies’ stock: They are often early.

In fact, Investors Intelligence, a newsletter edited by John Gray and Michael Burke, bases one of its market timing indicators on how the insiders were behaving 12 months previously.

A similar point was made earlier this week by Jonathan Moreland, editor of the Insider Insights newsletter. While acknowledging that recent insider behavior “seems totally inconsistent with this rally continuing unabated,” Moreland went on to argue that “it may take weeks or even months for insiders to be proven right. Money can be made in the meantime.”

The bottom line? Insiders are not always right. And even when they are right, they often are early.

Even so, it’s difficult to sugar-coat the recent increase in the pace of their selling,

Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. He has been tracking the advice of more than 160 financial newsletters since 1980.

The fundamentals are in place for silver and gold to move higher. The ongoing issuance of US treasuries and further quantitative easing by the Federal Reserve inevitably point to continued dollar weakness. The interesting fact that the Fed stepped in recently to indirectly buy some of the auctioned bonds points to a decreasing lack of investor appetite for US debt. That the Fed indulged in QE is no surprise – they announced that months ago. It was more the fact they had to step into the void created by the absence of buyers that was more telling. So much for the fundamentals – now what about the technicals of timing?

No doubt you are aware that the US Dollar Index has breached longer term support at 77.7 and is currently slogging to retrieve that level of support. We don’t think it will succeed but for how long it will hold out is as yet uncertain. The breach is slight and we are still looking for a decisive breach that will propel gold and silver higher. The chart below sums up the dollar situation with potential overhead resistance at 79.

Looking at silver, we are seeing a pattern emerge that suggests if the dollar breaks to the downside, silver will be targeting its former high of $21 though we are uncertain of it completely taking that high out in the medium term. Nevertheless a buying opportunity is present and as advised to subscribers, we already have gone long in July.

The question for those with positions is when to exit? The silver chart is shown below displaying the longer term trend in terms of months with the prospect of the upper channel being tested if the dollar falls through to its lower channel in the low 70s. As a guide, remember when the US Dollar fell to 70 in March 2008, silver went to $21.

Zooming into the daily charts, we see silver has begun a move up since mid-July not dissimilar to the moves up in February and June. Those moves lasted two to three months and we anticipate something of the same here. Note the support lines in the two prior moves and their similar angles of ascent. By way of projection I have copied the first trend line from February and superimposed it on the current move. It meets the longer term line of resistance at about $18. That is the kind of price action we hope silver will indulge us when the dollar breaks down further.

You will also note the Elliott wave notation. The last move up from April to June was a clear impulse wave and this current wave looks to be in a wave 3 now with all the upside potential that such a wave brings.

So the stage is set for some fireworks but to aid our silver and gold cause the resistance line on the US Dollar Index chart needs to hold. So far it is and next week should prove to be very interesting.

Is gold bullion coming back to life? Should one read anything into the rise of 6.2% (+$56) since the yellow metal’s low of early July?

When it comes to gold bullion and gold stocks, I need to confess I started my investment career in 1984 as none other than a mining analyst. Ever since those days of calculating net present values on my trusted HP 12C I have been intrigued by the shenanigans of the yellow metal and related stocks. And I have also learnt over the years that one should never underestimate the ability of the gold price to surprise when least expected.

Admittedly, part of the improvement in the gold price can be ascribed to the fading US greenback, which declined by 3.9% over the same period. I always have more faith in gold’s rallies when they are not only a reflection of US dollar weakness, but gold is also appreciating in most currencies. This serves as an indication of increased investment demand and is a phenomenon one should keep an eye on as gold might just have started moving independently of the dollar over the past few days.

Considering the fundamental outlook for gold, a very comprehensive report was recently published by Austria’s Erste Group. The analysts list the positive and negative influences below, leading them to conclude that gold is only half-way through a secular bull market and offers an outstanding risk/return profile.

Negative factors:
• Clearly falling jewellery demand.
• Recessions are basically not a good environment for the gold price (the gold price gets stimulated at a later stage by the measures taken during the recession).
• Gold tends to be held as asset and cash of last resort, which means it is liquidated in extreme financial situations. Given that more than 70% of jewellery is bought on the Indian subcontinent, the supply of recycled gold might continue to rise.
• De-hedging is coming to an end.
• The futures positions (CoT) would suggest a short-term correction.

Positive aspects:
• The worldwide reflationary policy will continue for a while.
• Global USD reserves are excessive, and the need to diversify is enormous.
• De facto zero-interest policy in USA, Japan and Europe.
• Central banks have changed their attitude towards gold.
• Supply still in long-term downward trend.
• Investment demand will remain high; Wall Street has discovered gold.
• Commodity cycle has a long way to go.
• Geopolitical environment remains fragile.
• China will increase its gold reserves.

Gold’s technical picture is certainly looking up. This is explained by Adam Hewison of INO.com who prepared a short analysis of gold’s most likely direction. (The analysis was done on Tuesday, but is still as relevant today as it was then.)

Seasonally, September also seems to be a good month for gold, with an average gain of 2.6% for the month since 1970.

Source: Plexus Asset Management

I am bullish on gold in the medium term, especially as I believe the vast money printing by central banks could set off strong inflation pressures down the road. I will not be surprised to see bullion passing the infamous $1,000 resistance level over the next few weeks – a question of fifth time lucky – and I will be inclined to add bullion to my portfolio on pullbacks.

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. – jschulmansr

I really hope you haven’t been fooled by this latest little upswing over the last couple of days in the Stock Markets. Please take your profits now and do it tomorrow! Turn that money over into resource based stocks especially Gold and Silver, Oil and Energy, and your basic foodstuff and base metal commodities. Wed. rally was to get rid of the weak shorts snatch their cash and today fool them to turn their positions and catch them with a whipsaw. Thurs. rally basically caused by Roubini semi positive remarks on the economy. How interesting, I wonder what tomorrow Fri. result will be when the markets hear about Roubini’s rebuttal (of course after market close!).

If you can’t wait scroll to bottom of the post for today’s free $725 value stock tip…

I wanted to take a minute and share with you some excellent links to INO.com Market Club. I am personally a member and I love their charting tools and their patented “Triangle Technology”. This is a “must have” for any serious trader. I’ve arranged for my readers a couple of special videos on the Dow Jones Industrial’s, the Dollar Index, the Aussie Dollar.

Watch them, look around Ino, Market Club, and sign up for the “free” stuff to check them out…

Important Dow Update, July 14th

In today’s short video I am going to be revisiting the Dow Jones Industrial index (DJI).

It has been sometime since we last looked at the relationship between the US dollar and the Australian dollar (USD/AUD). Today seemed like an opportune time to look at this cross and to figure out where it is headed using our “Trade Triangle” technology.

We’re also using MarketClub’s Fibonacci tool. If you have not seen this tool in action, I strongly recommend that you watch today’s video.

NEW YORK (MarketWatch) — Economist Nouriel Roubini on Thursday refuted reports that he had improved his economic outlook, saying his comments at an investors conference earlier in the day were taken out of context. “I have said on numerous occasions that the recession would last roughly 24 months. Therefore, we are 19 months into that recession. If as I predicted the recession is over by year end, it will have lasted 24 months with a recovery only beginning in 2010,” Roubini said in a statement.

Indeed, last year I argued that this will be a long and deep and protracted U-shaped recession that would last 24 months. Meanwhile, the consensus argued that this would be a short and shallow V-shaped 8 months long recession (like those in 1990-91 and 2001). That debate is over today as we are in the 19th month of a severe recession; so the V is out of the window and we are in a deep U-shaped recession. If that recession were to be over by year-end — as I have consistently predicted — it would have lasted 24 months and thus been three times longer than the previous two and five times deeper — in terms of cumulative GDP contraction — than the previous two. So, there is nothing new in my remarks today about the recession being over at the end of this year.

I have also consistently argued — including in my remarks today — that while the consensus predicts that the U.S. economy will go back close to potential growth by next year, I see instead a shallow, below-par and below-trend recovery where growth will average about 1% in the next couple of years when potential is probably closer to 2.75%.

I have also consistently argued that there is a risk of a double-dip W-shaped recession toward the end of 2010, as a tough policy dilemma will emerge next year: on one side, early exit from monetary and fiscal easing would tip the economy into a new recession, as the recovery is anemic and deflationary pressures are dominant. On the other side, maintaining large budget deficits and continued monetization of such deficits would eventually increase long-term interest rates (because of concerns about medium term fiscal sustainability and because of an increase in expected inflation) and thus would lead to a crowding out of private demand.

While the recession will be over by the end of the year, the recovery will be weak, given the debt overhang in the household sector, the financial system and the corporate sector; and now there is also a massive releveraging of the public sector with unsustainable fiscal deficits and public debt accumulation.

Also, as I fleshed out in detail in recent remarks, the labor market is still very weak: I predict a peak unemployment rate of close to 11% in 2010. Such [a] large unemployment rate will have negative effects on labor income and consumption growth; will postpone the bottoming out of the housing sector; will lead to larger defaults and losses on bank loans (residential and commercial mortgages, credit cards, auto loans, leveraged loans); will increase the size of the budget deficit (even before any additional stimulus is implemented); and will increase protectionist pressures.

So, yes there is light at the end of the tunnel for the U.S. and the global economy; but as I have consistently argued. the recession will continue through the end of the year, and the recovery will be weak and at risk of a double dip, as the challenge of getting right the timing and size of the exit strategy for monetary and fiscal policy easing will be daunting.

Now for the $725 "HOT" Stock Tip. Another leading newsletter is
offering to give the name of this new Gold Find the 7th largest
Gold deposit in North America. Surrounded by some very compelling
and excellent copywriting that I have seen, you are drawn into the
story about renegade geologist and his team have uncovered one of
the largest gold reserves in North America – over $10 billion dollars
worth.
All is now in place to begin mining the earth and getting the gold out
of the ground and the mine into production. Equipment is already bought
and being delivered. What’s even better is that this is an opportunity
that where this small company has so much gold that it’s about become a
mid-size gold producer in record time.
One thing I can tell you is this... The best time to "buy" gold is
before a single ounce comes out of the ground... while the shares
are still very cheap. Currently trading for around $6-$6.50, while
the gold alone is worth roughly $35 per share). Drum Roll Please... The name of the company Osisko Mining Corp. (OSKFF).
Enjoy and Good Investing! - jschulmansr
===============================================Claim a gram of FREE GOLD today, plus a special 18-page PDF report; Exposed! Five Myths of the Gold Market and find out:

· Who’s been driving this record bull-run in gold?

· What Happens When Inflation Kicks In?

· Why most investors are WRONG about gold…

· When and How to buy gold — at low cost with no hassle!

Get this in-depth report now, plus a gram of free gold, at BullionVault===============================================Nothing in today's post should be considered as an offer to buy or sell
any securities or other investments; it is presented for informational
purposes only. As a good investor, consult your Investment Advisor/s,
Do Your Due Diligence, Read All Prospectus/s and related information
carefully before you make any investing decisions and/or investments.
– jschulmansr

My fellow Investors, lately I have been hearing rumors going round about how many so called “safe warehouse’s bullion depositories” are about to be or are in process of being audited. Exactly, to find out if they have all the Gold and Silver they are supposed to be holding for investors. I just received confirmation from a very reliable source today – Jim Sinclair himself! If there is anything even slightly amiss, a panic will ensue for sure. So in order to protect myself and you my readers, I am recommending that you take delivery now and immediately. Yes, even from “Comex approved” warehouses. I will include below the missive I received from Jim Sinclair today. Ps- One other thing this will help accomplish aside from the most important fact of self/wealth preservation, it will definitely cause a “short squeeze” in the Gold and Silver markets and catch the big 3 banks with their shorts down! (okay pun intended! LOL!).

Now for the markets, the (DJI) is right back where we were a few days ago. 8750 (DJI) is still the key with upward resistance the big 9000 and support at 8500. I hope you followed my advice and took out most of your profits. You will never get hurt taking profits and remember you can always jump back in if you pulled the profit trigger a little early. Ps- today’s action looked awfully like a key reversal and the start of the next down leg. Remember, Treasury yields are going higher, Russia, China, and Brazil have all announced they are selling US Treasuries for IMF Bonds. The Fed can only keep buying Treasuries with the help of the printing press. How inflationary will that be? Otherwise, they have to let the US Dollar crash, in fact I think they are going to do both until it is too late…

Gold and Silver have been both inching slowly upward after the correction caused by the big 3 banks and their huge short positions. Everyone please write the CFTC and every other regulatory agency to investigate and stop the blatant price manipulation occuring in the Gold and Silver Markets. For More Info of Gold Manipulation go to www.gata.org.

Keep accumulating – especially in Silver and Gold producers. I’ll have another sweet pick for you in a few days. Speaking of sweet picks did you see what happened with West Timmins Mining (WTMNF)? Hope you took advantage of my pick when I mentioned it here. Until the next time- Good Investing! – Jschulmansr

Schedule automatic tweets, Thankyou for following me messages and much more! Be More Productive- Free signup… TweetLater.com

==============================================

Subject: Two trending markets revisited and analyzed for you

Here is a video analysis of the S&P and Gold markets. The technical analysis was right on at the time, but those markets have changed quite a bit in the last few days. The S&P had a huge rally and Gold is climbing at a steady rate, so what’s the new analysis? Glad you asked!

Below are two free videos, one on Gold and one on the S&P, that gives us an in depth technical look into these markets. Again the videos are free and very informative. Just Click on the Links Below…

Also- Here’s your chance to analyze that stock you have been thinking about adding to your portfolio. Just enter the ticker of any company, name of a commodity, or forex pair and get your complimentary technical analysis. It cost you nothing and no payment info will ever be requested.

“Nothing will unnerve the paper gold shorts more quickly and do more to undercut their confidence than to strip them of the real metal and force them to come up with more hard gold bullion to make good on deliveries. “Stand and Deliver or Go Home” should be the rallying cry of the gold longs to the paper gold shorts.” –Trader Dan Norcini

Dear Comrades In Golden Arms,

You know that information that comes to me has been reliable. You also know that the entire purpose of all of working here at JSMineset has been to get you through this safely. You also know that if we had not been here hundreds of thousands of people now holding gold would not be.

So please pay attention to the following.

I have heard rumors for some time, but today it was confirmed to me, that the Canadian mint’s present problems are not unique and that other depositories (vaults) have had an army of auditors descend on them in the last two weeks. Some of these depositories have names so famous that it would scare the hell out of you. The repercussions would be drastic if they turn out to be troubled.

Why take the risk?

I suggest to you now that you take delivery of all gold held in vaults and depositories on your behalf, but this time even from the most prestigious.

You can get delivery via armoured car service to your bank and utilize safe depository, spread over a few banks. You can insure your safe depository if you do not mind making your holdings public.

I believe that this recommendation is warranted, but also it will be the financial saviour of many.

The Gold, Silver, Oil & Nat Gas

Report

With so much happening in the market, emotions flying high and from being blinded by fear and greed many investors are wondering What do I do now?

I have put together some of my trading charts to help keep the overall picture clear for us commodity traders. My approach is very simple and effective when proper trading/money management is applied. FEAR and GREED are the two most powerful forces in trading and if you cannot stomach your trades when they go south, you most likely are trading to large of a position for your account size. Ok, I will try to stay on topic and not get into the education side of things J

The US dollar has had a massive rally considering the United States is in serious trouble. My thoughts are investors bought the USD as the entire planet started to crack thinking it was a smart investment. Which is could be a great play for the long term but I plan on covering that next week with monthly chart analysis for all these commodities.

I have heard a few analysts on CNBC say the US Dollar has broken its down trend. The question I am wondering is: What time frame are they looking at? The daily chart looks strong but if you zoom out and look at the weekly or monthly chart, we have not even made a higher high yet. Everyone sees the market differently that’s for sure.

The US Dollar – Head & Shoulders, Knees then ToesThis chart shows a perfect head and shoulders pattern which made a text book breakout. To keep this report short and to the point, the USD is at support and I expect we will see a rally higher to the 84 – 88 levels which would complete a larger head and shoulders pattern on the monthly chart. A breakdown from the monthly head and shoulders would most likely start the next major leg lower. The USD could rise here, thus pull the price of gold and silver down temporarily and that is why I have locked in some profits on these commodities.

The Price of Gold – Daily GLD Fund

Gold is currently pulling back from resistance and in my opinion forming the right shoulder which will complete this reverse head and shoulder pattern. Last week I took some profit on my gold position and currently hold a core position hoping prices will hold at my next support trend line. If prices breach that level ($91) then I will exit the balance of my position and wait for the next low risk setup.

The Price of Silver – Daily SLV Fund
Silver is in the same position as gold. I am expecting a pullback for a re-entry.

The Price of Oil – Daily USO Fund
Oil has been on the run since May. Oil had a near perfect breakout/buy signal (Risk was over my 3% risk setup) but many traders took advantage of this signal and are now experiencing massive gains. Tighten stops to lock in some profits and let the rest ride until the next support trend line is breached which will provide more wiggle room for oil to take a breather before moving higher again.

The Price of Natural Gas – Daily UNG Fund
Last week I provided the weekly charts with analysis of all these funds. UNG was the one that really looked exciting. On the weekly charts its very similar if not identical looking to the price action that oil had before it sky rocketing. This chart looks like a spring coiling tightly and getting ready to explode. Only time will tell but keep it on your trading platform!

Trading Conclusion for Gold, Silver, Oil & Nat Gas

In short, the US Dollar is trading at support and could be starting a nice rally to form the second shoulder which can be seen on the monthly chart. If this happens I expect gold and silver will have some selling pressure.

Oil continues to rally and short term traders should be thinking about tightening their stops to lock in some gains on the first sign of a reversal.

Natural Gas looks locked and loaded for a big bang. I’m waiting for my signature setup before jumping onboard as it helps improve the odds of the trade going in my direction after I enter a position.

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. – jschulmansr

Today, the big 3 shorts tried to push and manipulate Gold beneath $950, however once again, they failed. Gold hit a low of $946 before bouncing back up and closing at $953. $950 is the new base of support for Gold. The Stock Market did manage to claw it’s way back to basically even/ unchanged for the day.-Good Investing! – Jschulmansr

==============================================Subject: Two trending markets revisited and analyzed for you

Here is a video analysis of the S&P and Gold markets. The technical analysis was right on at the time, but those markets have changed quite a bit in the last few days. The S&P had a huge rally and Gold is climbing at a steady rate, so what’s the new analysis? Glad you asked!

Below are two free videos, one on Gold and one on the S&P, that gives us an in depth technical look into these markets. Again the videos are free and very informative. Just

Also- Here’s your chance to analyze that stock you have been thinking about adding to your portfolio. Just enter the ticker of any company, name of a commodity, or forex pair and get your complimentary technical analysis. It cost you nothing and no payment info will ever be requested.

Today I decided to become involved and take action, here is the letter…

Sent to my elected officials in congress; John McCain, Harry Mitchell,

and Jon Kyle.

An Open Letter To Congress – Stop!By: Jeffrey S. Schulman Sr.Dear Hon. Represenatives’s John, Harry and Jon; I have written to you many times before on various issues. Since my last communication, I am in process of becoming a District Committeeman for AZ. 5, 21. In addition I will be posting this letter and the results (actions you take), on my Blog, Dare Something Worthy Today Too! (https://jschulmansr.wordpress.com). Why I am writing to you this time is the question, “what are we doing to the financial futures of our present country, our children, grandchildren, and even great-grandchildren?” I am gravely concerned in light of the following… In May of last year the U.S. money supply stood at roughly $834 billion. Now, 1 year later, the Federal Reserve has created an additional $941 billion out of thin air. Pay close attention to those numbers…· The amount of new money (FRN’s) the Fed has created is roughly $107 billion more than all the money that was in circulation just a year ago.· In other words, the U.S. money supply has more than doubled! Think about what this does to the value of your dollars, to your savings, to your paycheck, to your retirement income? A doubling of the money supply means your money is worth half what it was. Of course, your money’s loss of value won’t manifest itself overnight. It will take time for the Fed’s counterfeiting to drive up prices. But those who get the new money first will be able to spend it while prices are still low, increasing their wealth at your expense. In addition, The Fed regulates banks, influences interest rates, and determines the size of our money supply through a complex process, called Open Market Operations, that involves buying and selling securities (mostly government debt). The Fed’s policies determine the value of your money, the health of the economy, and the rates you pay to borrow. The Fed’s decision-making process is secret, using confidential information. Minutes of these secret meetings aren’t due until three weeks after decisions are announced. Transcripts of meetings don’t become available until five years later. Aside from the Chair, Fed board members serve the longest terms of any federal bureaucrat (14 years), and they can’t be fired for political reasons. The Comptroller General, head of the Government Accountability Office, is legally prohibited from auditing the Fed’s Open Market operations, and several other important Fed activities. The Fed is part of the Federal Government, but acts without any of the regular checks and balances. Next, The Fed and the federal government has made a lot of promises in our names. It has committed us to pay most of the health care expenses of the elderly (Medicare) and to provide them with a small stipend (Social Security). It has also borrowed trillions of dollars, to pay current expenses, which your children and grandchildren will have to repay. Unfortunately, future revenues will be insufficient to fulfill these promises.The Government Accountability Office estimates the future shortfall in funding at $53.3 trillion. Other experts say the number is almost certainly higher. This means that every full-time worker owes a staggering $440,000+, courtesy of government excess. Eventually, that debt must be paid, either in higher taxes, or in reduced benefits. These numbers represent a looming crisis of staggering proportions. Fortunately, there is still time to fix and reverse this crisis… The first thing I am asking you to do is co-sponsor and support Congressman Ron Paul of Texas bill that he introduced H.R. 1207, the Federal Reserve Transparency Act. This bill requires an audit of the Fed by 2010. Senator Bernie Sanders of Vermont has introduced the similar S.604 in the Senate. Please support and vote for these bills. Next I am aware that the federal government has future unfunded liabilities estimated at $53 trillion. Please stop ignoring this problem. Please start reducing spending now. Balance the budget now. And start retiring the debt now so you can stop spending so much of my tax money on interest charges. Finally and of critical importance (actually all three requests are of critical importance), In the 110th Congress, Rep. Ron Paul introduced three bills that would have brought the above benefits. He will re-introduce them this year, and they should be combined into ONE simple bill. The benefits in addition to stopping or at least curbing inflation are these:

Ending inflation would cause your money to buy more and more as the economy grows, instead of less and less, as it does today. Stopping inflation would also end bubbles and booms, and the recessions they cause.

The three bills which should be combined into one simple bill are these: The 15-word “Honest Money Act” would repeal the 41-word legal tender law, which gives the Federal Reserve a monopoly over the money supply. The 104-word “Free Competition in Currency Act” would repeal the 69 words of Title 18 Section 489 of the U.S. Code, which gives the United States government a monopoly over the creation of coins for use as currency. The 193-word “Tax-Free Gold Act” would prohibit federal and state taxes on precious metal coins and bullion. The explanation on why we should repeal the Fed’s legal tender and coinage monopoly is this: Every paper dollar you own carries the words “Federal Reserve Note” (FRN). This means they were issued by the Federal Reserve System (the Fed), a national bank created by Congress. The legal tender law gives the Fed monopoly control over what you use for money. When a currency is legal tender you are legally compelled to accept it in payment for debts, even if you’ve made a contract to be paid in some other currency or commodity, such as gold. Abolishing taxes on precious metal coins and bullion, and repealing both the legal tender law and the federal coin monopoly, would free you to use other currencies, gold, silver, or all of them at the same time, including FRNs. If this seems like a strange new world to you, please realize that you already live in this world to a certain extent. When you check-out at a store you can already pay using cash, check, debit card, or credit card, and you probably also have different accounts you use for various purposes. Repealing the legal tender monopoly would simply give you more choices. Choice is good because it allows competition. Monopoly is bad because it leads to price-fixing. And monopoly control over what you may use as money provides the greatest price-fixing power of all. It impacts ALL of your economic transactions. The Fed can manipulate the price of everything by increasing the number of circulatingdollars (inflation), or by decreasing that number (deflation). You already know what it means when counterfeiters inflate the money supply. They use their fake money to get something for nothing, taking wealth from others without creating any wealth of their own. It’s a form of stealing. But the long-term consequences of counterfeiting are even worse than the initial theft. If the counterfeit dollars were allowed to stay in the economy, instead of gradually being removed from circulation, the result would be an ever-growing inflation of the money supply. This inflation would trick businesses into making a disastrous mistake.

Thus, if you were a widget maker you would see an increased demand for your widgets because of the extra dollars pumped into the economy by the counterfeiters. A sense of increased demand and increased wealth would be the “bubble,” or “boom,” that always follows an inflation of the money supply. Your widgets would start to fly off the shelves faster than you could make them. You would have to increase prices to maintain inventories and invest in new production to meet the increased demand. But this increased demand would be an illusion, because . . . Everyone else would raise their prices too. And they’d increase them for the same reasons you did. Rising prices would remove the perception of increased wealth and soak up the extra spending power created by the counterfeit dollars. This would cause the demand for your widgets to shrink back to its old level, but with a wicked twist . . . The increased inventories and expanded production capacity you created in response to the inflationary boom would turn out not to be needed. Your widgets would start to gather dust on the shelf and you would have trouble paying your bills.

The result? You would lay-off recently hired employees and close your recently expanded production facilities. First came the inflationary boom, or bubble, and then the bust, or recession. Extra FRNs created by the Fed work exactly the same as extra FRNs created by counterfeiters. They allow those who get the dollars first to get something for nothing, followed by a boom, and then a bust. The Fed has numerous ways to create new FRNs out of thin air. Economists cloud these methods in complicated jargon, and the talking heads on TV make it all sound perfectly normal and even necessary, but the result is exactly the same as with illegal counterfeiting. Given the above explanation it should come as no surprise that the greatest boom and bust in American history happened immediately following the Fed’s birth in 1913. Fed inflation put the inflationary “roar” in the “Roaring Twenties” followed by the biggest bust ever, the Great Depression. Past inflations, booms, and busts were created through essentially the same process, including the recent stock market and housing bubbles. The Fed is simply the government’s latest-and-greatest tool for legalized counterfeiting. Imagine what would happen if FRNs had to compete with gold, a form of money that can’t be significantly inflated or deflated because of its scarcity and durability. . .

People would begin to have gold accounts that they would use to buy and sell. The ownership of the gold would be transferred back and forth using checks, debit cards, paper certificates (currency), and a few coins, just like with FRNs. When you went shopping you might start to see two prices, one in FRNs and one in a certain weight of gold. If the Fed inflated the number of FRNs you would see the FRN prices rise while the gold price would stay roughly the same. You would begin to prefer to pay the gold price, so you would want to be paid in gold too. How could the Fed stop the flight to gold? Only one way, Stop inflating the number of FRNs (printing more new U.S. Dollars). Congressman Paul has hit upon the easiest way to end inflation, and the booms and busts that follow in its wake. Simply repeal the legal tender monopoly enjoyed by FRNs, and the coinage monopoly held by the United States government. Stop taxing exchanges in commodity metals. Allow monetary competition. This would help end inflation.

But that’s not all . . . Forcing FRNs ( the U.S. Dollar) to compete with gold would also confer one other benefit. Over time the prices you pay will tend to fall as increases in economic efficiency (for example, technological improvements) lower the cost of production and increase the supply of goods and services. A stable money supply tends to become more valuable over time, unlike an inflationary currency that constantly loses value. Once again I am asking you to Audit the Fed and support HR 1207, S.604. Next, reduce spending now! Balance the budget and start retiring U.S. Debt. Stop the manipulation of Gold and Silver Prices. Finally, Please sponsor and support “The Honest Money Act”, “The Free Competition in Currency Act”, and the “Tax-Free Gold Act”. We will remember your choices and actions, and your votes with our votes in the next elections.Sincerely,Jeffrey S. Schulman Sr.

My Note: Please Join me!, write your elected represenatives and ask them to support all of the measures listed in my letter.- jschulmansr

Here We Go Again! (DJI) Key make or break point 8750. The rah rah is working partially and so stocks continue to creep up. However after looking at Gold, Oil, and Treasuries we have to ask what is really about to happen. Here’s my take in one word… Inflation. Now let’s make that word a little bit more truer… Hyper-Inflation! Yes, my readers that is what is about to come up. You may now just be starting to hear the mainstream press talking about inflation fears, but still they have their heads in the sands and are going on ad nauseum about the glimmers of recover and how were are in a new Bull market for stocks. The only real Bull Market for Stocks are in the hard assests sectors i.e. Gold, Silver, Oil, and the like. Oh, don’t get me wrong, I think the (DJI) will make another stab at 9000 if it can successfully break thru the (DJI) 8750, (S&P 500) 975. Failure here means the beginning of the downward spiral all the way down to (DJI) 6500 again. The Dollar is doomed and is already on the way down. Just think what happens to your purchasing power with the Dollar going down and inflation kicking in? Definitely not a pretty picture!

Now for Gold and Silver is there any doubt? To the moon Alice! Do yourself a favor take your profits out now in Stocks and put them into hard assets. The reason is simple, they tried to manipulate the prices yesterday by taking huge short and driving Gold down to $960 level. Then look what happened today Gold came screaming back. Gold will take out the $1007 barrier! There will be resistance and more huge short positions taken around $990 in a last vain attempt/manipulation to hold Gold back, but it will fail. Remember to preserve the purchasing power of your dollar is to buy Gold and Silver, especially Silver NOW! Get aboard the Precious Metals train now, it is leaving the station… Good Investing! – jschulmansr

Today only One Article – I know you just can’t wait for the Hot Tip, so if in a hurry scroll down to bottom/end of post. But then COME back and read this article and click on the links within the article to learn what is really going on with Precious Metals price manipulation. -jschulmansr

First of all, bullion-ETFs soak-up billions of investor-dollars each year, which would otherwise be invested in real bullion, or in the shares of precious metals miners. Naturally, this has helped to depress the price of silver, and severely depress the price of silver miners – since almost all of the diverted investor-dollars were diverted from the miners, and not bullion, itself. I also showed how these fraudulent investment vehicles have been used to artificially inflate the supposed inventory-levels of silver stockpiles.

Specifically, at a time when actual silver inventories are at their lowest level in centuries, the (supposed) amount of “bullion” these funds claim to hold has singlehandedly resulted in “official” inventory levels tripling in just three years – after plunging by 90%.

Today’s market price is based upon these phony “inventories” despite the fact that the bullion-banks who claim to hold all this silver are never subjected to audits, to determine that they are not only holding enough silver to cover their custodial agreements with the “bullion-ETFs” – but are also holding sufficient silver to cover the MUCH larger “short” positions of these Manipulators (see “Silver Manipulation the worst in history – Ted Butler”).

Unless and until there is such a full and complete audit, the only rational assumption for investors is this supposed “tripling”of inventories is totally illusory, which also means that the “bullion” that is claimed to be held by these bullion-ETFs is also illusory.

As I have also mentioned before, it is elementary economics than any “good” which is undervalued will be over-consumed (relative to its current price). Thus, we have TWO extremely important dynamics which are setting up this sector for a final “implosion” of the criminal conspiracy by the anti-precious metals cabal.

First, price-suppression means the (actual) tiny inventories of silver are still declining not increasing. It is simply absurd to claim that with record, investment demand and declining mine production (due to the dramatic cuts in base metals production) that inventories are increasing. The under-pricing of silver simply confirms this trend.

Secondly, with real inventories only 1/3rd of what is claimed by the Manipulators, continuing to under-price silver (through continued manipulation) must result in a supply “squeeze” which inevitably causes the price to “spike” (and begin to correct toward some sort of medium-term equilibrium). Given that there has been no similar depletion of gold stockpiles (merely the transfer of ownership), it is far more likely that the final defeat of the anti-gold cabal will be accomplished via a default in silver markets.

The BIG question in the minds of all precious metals “bulls” is when and how will this final victory occur?

Many commentators have pointed to the rigged Comex markets in New York as the place where the final destruction of the Manipulators will occur. However, with the short positions of the bullion-banks, and their (supposed) “custodial agreements” with the bullion-ETFs being “two sides of the same coin”, then implosion could originate in either component of this fraudulent manipulation.

A bullion-default at the Comex (or “Crimex”, as some like to call it) is a very simple scenario. The Comex is essentially selling its phony, “paper” futures for less than any other bullion market. Thus, at some point, large buyers will simply step into this market and continue relentless, heavy buying until default occurs.

Specifically, there would be a “failure to deliver” of bullion to a buyer (or buyers) – who chose to hold their futures contract until expiry, and thus take “physical” delivery of real bullion. As has been reported by several commentators, apparently such a default nearly occurred just weeks ago (see “Did ECB save Deutsche Bank from Comex gold-default?”).

There has been a great deal of frustration among the “gold bugs” (in particular) that such a final “show-down” has not already taken place. However, perhaps we would all be more patient in this respect if we were to try to put ourselves in the position of such big “players”.

Looking at silver, based on fundamentals, it is totally obvious that silver is headed for a spectacular explosion in its price. At a time of record demand for gold and silver, there are lower inventories of silver (relative to gold and in absolute terms) than at any time in centuries. Simultaneously, the gold/silver price ratio is more unfavorable for silver than at nearly any time in history, currently over 60:1. The long-term price ratio (over thousands of years) is 15:1. Additionally, as “elements” in the Earth’s crust, silver is only 17 times as plentiful as gold. Thus, a 60:1 ratio is not remotely sustainable, even over the medium term.

Therefore, armed with the knowledge that investing in silver will yield a huge windfall for all long-term investors, do you (as a large “player” in the silver market) force the inevitable implosion now (and “kill” the proverbial “goose that lays the silver eggs”) – or, do you patiently use the Manipulators game against them: buying as much grossly undervalued silver as you can from these criminals, before their inevitable self-destruction?

From this perspective, it is suddenly much less automatic that the demise of the Manipulators will occur at the Crimex.

I would remind people about an event which went practically unreported last year in North America: at the time of AIG‘s near-bankruptcy, the European bullion-ETFs “guaranteed” by AIG briefly plunged in value – to a price MUCH lower than the nominal price of the bullion they (supposedly) held. The reason? Investors were “betting” in a clearly visible manner that if AIG was forced into bankruptcy it would not be able to honour its “custodian agreements” with these bullion-ETFs – leaving the investors in these funds holding paper and not bullion.

Thus, the outrageously expensive bail-out of AIG (over $180 BILLION, and counting) was not undertaken solely in order to secretly funnel roughly $10 billion into the vaults of Goldman Sachs. It was also bailed-out to prevent a domino-like chain of events. All it will take is for one “bullion-ETF” to default, and then the entire scheme/scam of the Manipulators would inevitably collapse.

The sequence of events is obvious: after seeing one group of bullion-ETF investors wiped-out (or nearly so) by fraud, then obviously the unit-holders for all (so-called) bullion-ETFs would demand thorough and honest audits of the bullion-banks who are essentially running these scams.

Even if the bullion-banks could scrounge-up enough bullion to cover their “custodial agreements”, there would be little if anything left over to “cover” their much larger “short” positions. With “blood in the water”, futures-buyers would obviously immediately start lining up for “delivery” at the Crimex – hoping to be the last buyer to grab some real bullion before the Manipulators were completely wiped out.

Thus, there appear to be three very plausible scenarios leading to the destruction of the Manipulators, and the explosion of the price of gold and silver.

The frequently-predicted default at the Comex;

The bankruptcy of one (or more) of the bullion-banks; or

A default of one or more bullion-ETFs through a thorough audit being performed.

Given what the U.S. government has already shown it was willing to spend to “defend” AIG’s custodial agreements with bullion-ETFs, the second scenario would appear to have the least probability of occurring. However, there is still somewhere close to a quadrillion dollars of derivatives floating around in Wall Street’s private “casino”. Any surprise-implosion of a position in this market could create such unimaginable losses (hundreds of times higher than those of AIG) that a bail-out would simply be impossible to ram-through the corrupt, U.S. government – without literally setting off a second “American Revolution”.

Personally, I see the default of the bullion-ETFs to be slightly more likely than any other scenario for destroying the Manipulators. As with any scam, the larger it grows, the greater the likelihood of exposure. When bullion-ETFs were first created, their claim that they could buy infinite amounts of bullion, with zero “premiums” and store all this bullion for zero storage costs attracted little attention.

With the holdings of these bullion-ETFs rapidly approaching the total annual production of precious metals miners, and already being larger than the national stockpiles of almost every nation on Earth, this obviously-suspect “business model” will attract increasing doubt and skepticism among informed investors – until even blind/deaf/dumb “regulators” are forced to conduct a reputable audit of this sector.

For those hoping to read precisely when and where the Manipulators will meet their final defeat, I suppose you will be disappointed. Sorry, but I’m an “economist” – not a “psychic”. However, hopefully readers will derive some use out of this commentary.

First, because of depleted inventories, it is much more likely that it will be a silver default which “kills” the Manipulators, instead of a gold default. Secondly, as precious metals investors wait for this inevitable occurrence, you are reminded that there are three potential developments to watch for – and not just a “failure to deliver” at the Comex.

In the meantime, any/every investor who continues to add to his (or her) precious metals positions (preferably during short-term dips) is guaranteed to be richly rewarded. Given the extremely uncertain times in which we live, the reward of financial security is “precious”, indeed.

Disclosure: I hold no position in bullion-ETFs.

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One last note- I didn’t forget my promise, here is another HOT stock to buy and forget (hold). (WTMNF) a junior explorer West Timmins Mining. Currently trading in the .70 to .80 cent level. I have mentioned before load up on the junior and mid-tier Precious Metals Producers, but to throw in some good exploration companies. West Timmins fits in the latercategory. They have the financing in place and are currently drilling. Here is a copy of one of their press releases from May 12th, 2009. I think it speaks for itself. -Good Investing! -jschulmansr

(Vancouver, May 12, 2009) – West Timmins Mining Inc. (WTM:TSX) (“WTM” or the “Company”) today announced that bonanza grade gold mineralization has been intersected from the North Zone on its 100% owned Thorne Property, part of the Company’s West Timmins Gold Project, in Timmins, Ontario. All three holes testing the North Zone returned high-grade gold mineralization, highlighted by hole GS09-31 which returned 8.20 metres (26.90 feet) grading 13.64 g/t (0.40 oz/ton) gold, including 2.40 metres (7.87 feet) grading 41.30 g/t (1.20 oz/t) gold.

“The North Zone adds another zone of high grade gold mineralization over significant widths on our 100% owned property package in Timmins. These results continue to confirm the presence of multiple high grade gold zones located in close proximity to each other in the West Timmins District. This clustering of high-grade gold zones is perhaps the single most significant characteristic of the Timmins Camp. History does appear to be repeating itself in the west end of the Camp” said Darin Wagner, President and CEO of West Timmins Mining. “WTM will immediately expand the scale and scope of our drill program on our 100% owned properties in Timmins and welcomes the recently announced expansion of the drill program on the adjacent Thunder Creek Joint Venture.”

WTM now has six expanding zones of high-grade gold mineralization located within 3 kilometres of each other in the West Timmins District: the Rusk and Porphyry Gold Zones on the Thunder Creek Joint Venture, the High-grade and Central sub-zones within the Golden River West Zone, the Hwy 144 Zone where high-grade intercepts have recently been reported and now confirmation of continuity and bonanza grades from the North Zone.

The North Zone is located along the northern flank of the Golden River Trend on WTM’s 100% owned Thorne Property. Historic work in the North Zone area has been re-interpreted based in large part on the recent discoveries of high-grade gold mineralization on the Company’s adjacent Thunder Creek Property and within the Golden River West Zone. This work has lead to the identification of a steeply plunging zone of high-grade gold mineralization. The North Zone mineralization is characterized by silica veining and flooding associated with significant visible gold mineralization and is very similar to many of the vein-style gold deposits in the Timmins Camp. Drilling has also intersected additional gold bearing structures beneath the North Zone, the NL1 and NL2 structures, which remain open for additional testing – again characteristic of gold systems in the Camp.

On-going exploration activities are focussing on the area between the Timmins West (now Timmins) gold deposit and the Destor-Porcupine Fault, located 5.0 kilometres to the south, where multiple gold-bearing systems have been confirmed within WTM’s extensive West Timmins Project land holdings. The Destor-Porcupine Fault is a deep-seat fault system which can be traced throughout the entire Timmins Camp.

Quality Control and Assurance

Geochemical results reported are from halved drill core samples collected from WTM’s 100% owned Thorne Property, part of the Company’s West Timmins Gold Project. Core samples were collected by employees and consultants in the employ of the Company and are subject to the Company’s quality control program. Sampling was conducted on site at the Company’s exploration office in Timmins, Ontario and sealed samples were transported to Swastika Labs preparation facilities in Swastika, Ontario. Samples were assayed for gold by standard fire assay- ICP finish with a 30 gram charge. Gold values in excess of 3.0 g/t were re-analyzed by fire assay with gravimetric finish and intercepts returning in excess of 8.0 g/t, or displaying visible gold mineralization, were re-analyzed by pulp screen metallic assaying for greater accuracy. The remaining half of the drill core is stored on-site at the Company’s Timmins exploration office.

For quality control purposes blank, duplicate and analytical control standards were inserted into the sample sequence at irregular intervals. Mr. Darin Wagner (M.Sc., P.Geo), the Company’s President, has acted as non-independent qualified person for this news release. The qualified person has visited the project site, examined the intervals reported and, has verified that any significant analytical discrepancies have been resolved and that the reported results meet the Company’s quality control standards.

About West Timmins Mining Inc. (www.westtimminsmining.com):

WTM is focussed on the exploration and development of district-scale gold projects in the major gold camps of North America. The Company is advancing the high-grade Rusk and Porphyry Gold discoveries on its Thunder Creek joint venture in Timmins, Ontario and continues to test the nearby 5.0 kilometre long Golden River Trend. WTM also has active gold exploration projects in Mexico, highlighted by the high-grade Lluvia de Oro gold-silver Project in Chihuahua State. West Timmins Mining is based in Vancouver, British Columbia, Canada and trades on the Toronto Stock Exchange under the symbol WTM.

On behalf of the Board of

West Timmins Mining Inc.

“Darin W. Wagner”

Darin W. Wagner

President and Chief Executive Officer

For further information contact:
John Toporowski, Manager, Investor Relations

The TSX has not reviewed and does not accept responsibility for the accuracy or adequacy of this news release, which has been prepared by management.

For further details on West Timmins Mining Inc. please refer to prior disclosure at www.sedar.com. The securities described in this press release have not been and will not be registered under the United States Securities Act of 1933, as amended, or under any U.S. state securities laws, and such securities may not be offered or sold in the United States absent an exemption from such registration requirements.

This press release contains forward looking statements within the meaning of applicable Canadian and U.S. securities regulation, including statements regarding the future activities of the Company. Forward looking statements reflect the current beliefs and expectations of management and are identified by the use of words including “will”, “expected to”, “plans”, “planned” and other similar words. Actual results may differ significantly. The achievement of the results expressed in forward looking statements is subject to a number of risks, including those described in the Company’s annual information form as filed with the Canadian securities regulators which are available at www.sedar.com. Investors are cautioned not to place undue reliance upon forward looking statements.

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. – jschulmansr

Key Test Today! Stocks are Flirting with disaster, 8268 (DJIA) is the neckline of a head and shoulders. If (DJIA) closes beneath that, then we are definitely starting the next leg back down. Nothing to hold the freefall except some support at 8000 (DJIA) and then secondary confirmation of a new down move if breaks the next support at (DJIA) 7840, 7800, and then 7550. Take your profits now before you ride the DJIA right back down again.

Gold and Silver however are poised to take off! If Gold successfully closes above $980 then next stop – new ALL time highs. As I mentioned yesterday hre is what I see for Gold. I predict that Gold will break $978- $980 and push up to approximately $1075 to $1090 on the first leg. We will see a normal retracement down to $950- $975 and then blast off to $1150 -$1250. I personally think with the hyper-inflation shoe about to drop, coupled with the remaining half of the derivative crunch. We can easily see $2250 to $2500 Gold by the end of the year. Keep accumulating Gold and Precious metals especially the junior and mid-tier producers. There are still companies out there selling at or below book value.

In case you missed it yesterday here is the stock tip that I was offered along with an advisory service costing $297 year. This is the stock in their “special report”. just came across a sweet little play in the cobalt industry, supplies are dwindling fast and there will be a shortage just at the time this company comes on line with production. This company will have the only high grade cobalt production in the United States and will be able to supply approximately 12-14% of Cobalt needs for the USA. If you check out what Cobalt is used for you will understand why this stock has the potential to be a Grand Slam. Production is anticipated to be approximately 1525 tons per year with a 10yr life based on current reserves. I just received an offer to buy this tip along with an advisory service for $297 yr. I’ll give it to you for free. That’s just the kind of guy I am, LOL! The name of the company is Formation Capital Corp. Trading symbol (FCACF). I just picked up a bunch @ .35 cents/share, but as always do your due diligence, read the prospectus and company reports. If nothing else put (FCACF) on your watch list / radar. – Good Investing! -jschulmansr

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Subject: Two trending markets revisited and analyzed for you

Here is a video analysis of the S&P and Gold markets. The technical analysis was right on at the time, but those markets have changed quite a bit in the last few days. The S&P had a huge rally and Gold is climbing at a steady rate, so what’s the new analysis? Glad you asked!

Below are two free videos, one on Gold and one on the S&P, that gives us an in depth technical look into these markets. Again the videos are free and very informative. Just Click on the Links Below…

Also- Here’s your chance to analyze that stock you have been thinking about adding to your portfolio. Just enter the ticker of any company, name of a commodity, or forex pair and get your complimentary technical analysis. It cost you nothing and no payment info will ever be requested.

Jim Sinclair is the doyen of gold experts. It is interesting to see a very clear timeframe for the gold price posted on his website yesterday:

Gold reacts as currency support for the dollar enters mid June to a slow decline (that is the official definition of a strong dollar policy, really).

End of 2nd week going into the beginning of the 3rd week of June Gold launches towards and this time through the neckline of the reverse head and shoulders formation.

Gold rises to $1224 where it hesitates.

The OTC derivative market takes on the dollar as short sellers into dollar support.

This OTC derivative currency short position builds.

t is the US dollar where Armstrong will get his WATERFALL.

The main selling takes place when Israel makes a major miscalculation.

Hyperinflation is always and will continue to be a currency event.

Hyperinflation will be a product of the upcoming massive OTC derivative short dollar raid.

“Should I be correct in the gold price action going into late June, it will fit Armstrong’s criterion for a move to $5,000”, adds Mr. Sinclair whose predictions are not always right, and who got similarly carried away last summer.

But there is the old mantra in forecasting that if you repeat something often enough then it will be bound to happen in the end.

And to be fair to Mr. Sinclair, the gold positive scenario stacking up right now does look unstoppable.

Here we go again. The forces of legitimate money versus the incumbent purveyors of the candy floss economy squared off at the $1,000 an ounce line over which yet another battle will be fought. Arrayed against either side are formidable new elements and tried and true old ones. As usual, the first volley has been catapulted over the walls of the hucksters by the defenders of the essential timeless truth of gold’s naturally stored value against the counterfeit paper currencies.

The liabilities of the enemy have increased, and the short positions in the COMEX market are sufficiently stacked that the big bank defenders simply cannot allow gold to win decisively. G7 governments are allied against gold to a man, while emerging economic behemoths China and Russia stand in opposition.

In particular, China’s revelations that it has been in a continuous accumulation mode for the last several years and is now the fifth largest sovereign reserve of gold has created an impetus in the gold camp that has been seen lacking in the past. Institutional and sovereign investment entities now perceive a floor in the gold price based on this information, and one must beg the question as to why China would make such a revelation when it threatens to undermine the value of its $2 trillion in U.S. debt holdings.

China has also been careful to avoid buying gold on the international market, for fear, it says, of creating a stampede into the precious metals that would immediately increase the cost of its stated intention to continue accumulating gold towards the backing of the yuan (renmibi) as a global reserve currency.

Yet that is precisely what has happened. Ostensibly, the justification for tipping their hand exists in the fact that they’ve resigned themselves to the fact that selling poison toys and pet foods to Americans in exchange for a currency that loses value like light into a black hole is an acceptable if imperfect transaction. With $50 billion a year in interest payments from the U.S., they can hedge the risk buy using it to buy gold.

With the perceived floor arguably at $850, downside risk is limited in gold far more so than in U.S. treasuries, which, if mainstream media is to be taken as remotely credible, is the current favorite of safe haven investors.

‘Safe Haven’ is about to get painted with same fragrant brush as ‘AAA-rated’ investments.

Goldbugs are salivating at the prospect of vindication, but seasoned veterans of the war know that the governments and central banks arrayed against gold are not fair fighters. Since the largest players in the futures market occupy both sides of the contract, and never take delivery of the physical gold, they can orchestrate a perpetual negative sentiment towards gold by driving the future price downward by simply amping up the short positions, thus making gold appear poised for a sell-off. This has been standard operating procedure for the last decade, and it is interesting to note that ever-bigger short positions are having less influence over shorter durations before the bulls shrug off the flimsy performance and take gold higher.

Critics and observers of this U.S. Dollar image management program point to the fact that such activity, while shoring up demand for U.S. Dollar debt in the short term, effectively undermines the entire global economy, and is among the fundamental causes of financial crises such as the housing collapse and the whole current global financial fiasco.

Proponents of this manipulation, who are increasingly legion in number, correctly predict an inevitable bursting of the damn catalyzed by investment demand overwhelming the short positions, forcing them to buy and cover to limit losses, which will, in itself, stimulate the gold price even further.

With the limited oversight and feeble reporting standards of the CFTC, the ploy is facilitated by complicit (or ignorant) regulators who ensure data is obfuscated and disclosure limited. It has been this collective effort on the part of the Dollar Defenders that continuously defeats gold’s advances, repeatedly castrating the bulls and sending them whimpering to lick their wounds and regroup.

But China is now leading the charge, and the bet is that they’re willing to forgo the lost value of their USD holdings to decisively undermine the global reserve currency once and for all and replace it with the Yuan, a move that would effectively mark the beginning in the shift of the global balance of power from west to east.

The United States, overextended militarily across the Middle East and Asia, with new fronts threatening to open in Iran and Pakistan, is perilously close to an international nervous breakdown. China’s opportunity is to ride to the rescue bearing smiles and steamed pork buns while dividing up what is left of the American industrial asset pool.

Our leadership of the last decade (or more accurately, absence thereof), eager to lubricate the workings of multinational financial interests, have inadvertently played into the patient hands of their biggest creditor by prostituting the national currency shamelessly to the point where every nation in the world can see what used up piece of spent jet trash the old USD has become.

While mainstream media dismisses the idea of the Yuan replacing the dollar as the international monetary standard, those of us who have tuned out at the perception management program on CNN recognize the event as halfway accomplished.

The truly explosive moment for gold will occur when the Chinese, at their discretion, decide to spring the trap, and abandon USD completely in favor of gold, suddenly spiking the price of gold straight north in tandem with the complete collapse of the U.S. dollar.

Don’t pay any attention to the second rate hacks trying to claim credit for predicting the fall…it’s been predicted repeatedly throughout history from Nostradamus to Roubini. Any student of economic history with 20/20 vision could see this coming, and here it is. “I told you so” is a waste of time. Who’s offering a solution?

Whether or not this particular battle at the Great Wall of $1,000 an ounce is the mother of all battles remains to be seen. Desperate times call for desperate measures, and while G7 governments collude to retain power, the unforeseeable is the greatest threat to gold.

That being said, veteran observers are optimistic, to say the least.

According to Bill Murphy, intrepid soldier of gold wars and standard bearer for the Gold Anti-trust Action Committee,

The Gold Cartel is giving it all they have no, as evidenced by the sharply rising gold open interest on the Comex … up some 23,000 contracts on Wednesday and Thursday. They are doing all they can to counter new spec buying.

My hunch is the next time we see $1,000, and that could be very soon, gold ought to take off from there, giving us more upside dynamic daily moves. The reasons to own physical gold are off the charts … HUGE investment demand, shrinking visible central bank supply (unrelated to the cabal), shrinking mine supply, shrinking dollar, concerns over sovereign wealth debt, a horrible US economy, and a US printing press that is going flat out and will have to for some time to come.

In my opinion, all gold has to do is to stay over $1,000 for a few days, and then all kinds of bells and whistles go off.

Bill is not the only one who thinks the breakthrough is at hand. Bob Moriarty of 321gold.com, himself a historically prescient oracle of market crashes agrees and warns that the stock market will be the first casualty of the new financial reality.

If you take a look at the dollar and the long bond, it looks as if they jumped off a cliff. This isn’t gold going up, it’s the dollar and bonds going down. When the market wakes up the stock market is going to take a giant dump. No more fake rally.

Investors by now should be well equipped to read the writing on the wall. Whether gold breaks through $1,000 and holds there, charts new territory at much higher levels, or is beaten back down through the offices of JP Morgan (JPM), HSBC (HBC) and Goldman Sachs (GS), is irrelevant.

Gold producer stocks are up, on average, over 22% this year in the Midas Model Portfolios, while intermediate producers and close-to-production juniors have piled on gains ranging from 20 to 200%, all since January this year.

You won’t hear anybody pointing that fact out on television, and you won’t hear that from your broker, in most cases. But the lesson is clear. Gold bullion is the place to be for wealth preservation, and gold producers and explorers is where risk capital is going to see utterly stupendous gains this year.

If you buy the hype of Wall Street and Washington and wade into the general equities markets, you have nobody to blame but yourself for the heavy losses you will surely sustain.

It is mildly amusing that when the precious metals markets are in confirmed uptrends, the perennial debate of whether it is best to own gold or silver always comes to the fore.

Both gold and silver, historically, have been money (merely utility in exchange). Gold in nature is approximately 15 times as scarce as silver. All the gold mined since the dawn of man, if molded into a cube, is said to fit inside a baseball diamond. Silver would nearly fill the stadium. China, now the world’s largest gold producer, had a silver standard as gold was more plentiful in China than silver, a bias that the west took full advantage of up through the 1870s. Silver imports by the Spanish Empire from their New World holdings were so large that it collapsed the European silver market. England, then on a bi-metalic standard, quickly switched to a pure gold standard. The Spanish Empire never recovered from the experience.

In the United States, the debate raged incessantly as to how the ratio would be “fixed” after the discovery of the Comstock Lode with western mining interests’ best known champion, Senator William Jennings Bryan, being the foremost proponent of a lower ratio. Seems it is an old debate. The good news is, you can own both. If/when the world returns to honest, stable money, you will need both: gold for the larger acquisitions and silver to make change.

While we await such an event, ratio trade the two metals to increase your holdings of precious metals.The ratio fluctuates wildly over time. In the 1970s and 1980s I used 28:1 and 40:1 as points that I would switch. At 40:1, I would be in silver. When the ratio dropped down to 28:1, I would exchange silver holdings for gold. Each time I switched, my stack of precious metals would increase in size even after dealing with the spread.

Find a precious metals dealer who will work with you on that. You maybe able to locate one that will only charge the spread on one of the metals and not both when you switch. Since then, the ratio has moved up. At one point it was even at 100:1. I now use 45:1 and 70:1 as switch points. See your tax accountant as to the benefits of such a program. Think 1031 Tax Deferred Exchange.

For those who do not want to break the rear axle of your automobile moving your silver when it comes time to switch, think about using ETFs that only reflect the price of the two metals. There are a variety of ways to accomplish this, from being in just one or the other to being long one and short the other. IF your objective is to accumulate the actual physical metals, do not use ETFs as a substitute for physical ownership. Rather, take profits from your switching trades and purchase the actual metals themselves. Gold vs. silver? No debate. Accumulate both.

Disclosure: long physical silver and gold

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A new site that is in pre-launch state that will become a virtual world – chat, shop, play, videos, etc. Anyways they are giving free shares (that should become actual company shares) to anyone who signs up and more shares if you refer people.

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Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments.

I’m back but before we get into the markets, I want to give everyone Thanks for your prayers for my Dad. We though we were about to lose him. So, I arranged for everyone to come out and see him, even his Grandkids. The visits perked him up tremendously. I continued to stay with him along with my wife. We took him out to his favorite restaurants and other places. So for the 3 weeks we were there he gained 16lbs, his color came back, and his body even started to produce Red Blood Cells. Even though he still needs occasional transfusions, was a major step in the right direction.He has regained his will to fight instead of giving up and slowly dying. So a very heartfelt Thank You to all who were praying! Each of you is very appreciated and I know God will Bless You manifestly in return…

Now for the markets… Wow! these last three weeks have been very interesting! When was the last time you have seen Stocks, Gold, and Oil rally at the same time? I will use the Dow (DJI) for my post today and provide links to some excellent analysis on the S&P 500 and Crude later in the post. Once again 8500 is the key marker for the Dow, failure to close strongly and move higher will mean we have a head and shoulders top here. A breakout above 8640 will confirm continued uptrend. Conversely a break below 8265 will mean the beginning of a strong correction to the 8000 level first and then 7850. If screams below that then down to 7500 with a test of the low around 6547. Personally I predict we will test the lows of 6550 first before we will ever see the DJI at 9000 or even 10,000. Sorry you bulls out there that is what I see in the charts.

For my favorite complex of Gold, Silver and Precious metals, a breakout over $978 signals a new strong push over $1000, or at least another test. Personally, I like the action of Gold here, building a nice base at $950. I predict that Gold will break $978 and push up to approximately $1075 to $1090 on the first leg. We will see a normal retracement down to $950- $975 and then blast off to $1150 -$1250. I personally think with the inflation shoe about to drop, coupled with the remaining half of the derivative crunch. We can easily see $2250 to $2500 Gold by the end of the year. Keep accumulating Gold and Precious metals especially the junior and mid-tier producers. There are still companies out there selling at or below book value.

I just came across a sweet little play in the cobalt industry, supplies are dwindling fast and there will be a shortage just at the time this company comes on line with production. This company will have the only high grade cobalt production in the United States and will be able to supply approximately 12-14% of Cobalt needs for the USA. If you check out what Cobalt is used for you will understand why this stock ahs the potential to be a Grand Slam. Production is anticipated to be approximately 1525 tons per year with a 10yr life based on current reserves. I just received an offer to buy this tip along with an advisory service for $297 yr. I’ll give it to you for free. That’s just the kind of guy I am, LOL! The name of the company is Formation Capital Corp. Trading symbol (FCACF). I just picked up a bunch @ .35 cents/share, but as always do your due diligence, read the prospectus and company reports. If nothing else put (FCACF) on your watch list / radar.

Last week I watched a video analysis of the S&P and Crude Oil markets. The technical analysis was right on at the time, but those markets have changed quite a bit in the last few days. The S&P had a huge rally and Crude seemed to steady out, so what’s the new analysis? Glad you asked!

Below are two free videos, one on Crude Oil and one on the S&P, that gives us an indepth technical look into these markets. Again the videos are free and very informatitive. Just Click on the Links Below…

Here’s your chance to analyze that stock you have been thinking about adding to your portfolio. Just enter the ticker of any company, name of a commodity, or forex pair and get your complimentary technical analysis. It cost you nothing and and no payment info will ever be requested.

* Gold to break $1,000 soon and push much higher this time
* 50% or more of Peter Schiff’s liquid assets are in gold/gold stocks
* Most people should have 10-20%, more if you are young and aggressive
* Many gold stocks could go up 50 or 100 times from current levels
* At some point, the rest of world will stop lending the United States money
* America is in for a rude awakening, when we have to return to producing and saving again
* It is impossible for the U.S. government to pay back its debt. Default is only option.
* Peter Schiff might run for Senate in Connecticut

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A new site that is in pre-launch state that will become a virtual world – chat, shop, play, videos, etc. Anyways they are giving free shares (that should become actual company shares) to anyone who signs up and more shares if you refer people.

The dollar is out. The U.S. dollar index has fallen 5% in the last week.

Treasury bonds are quickly falling out of favor. The yield on 10-year Treasury bonds has climbed from 2.5% to almost 3.5% since March signaling inflation fears and an unwillingness to fund ballooning government borrowing.

Gold is hot. Gold prices are back on the rise and gold stocks have done even better.

Is this a sign of things to come?

Well, if you take a look at the mainstream headlines, you’d think so.

An editorial headline on Bloomberg proclaims, “Dollar is dirt, Treasuries are toast, and AAA is gone.”

Even CBS News is warning, “Inflation could be coming to a U.S. dollar near you.”

To me, it seems just like a typical overreaction in the short-term.

Yes, the long-run trend for the dollar is down as the Fed keeps printing more and more of them and monetizing government debt. And yes, the prospects for gold get brighter and brighter with each passing week.

But there’s no reason to lose your head here. It’s going to take a few years for all this to play out. And the window of opportunity is still wide open to buy precious metals, real assets, and assets not denominated in the dollar (like ADRs).

That’s why, despite the strong interest in gold at the moment, I encourage you to continue to look for value in the sector. Right now, there seems to be some exceptional value in an asset which is so undervalued, it could outpace gold by 400% or more.

I’m talking about Silver.

When Gold Climbs, Silver Soars

In the past few weeks gold has been getting a lot of attention. With all the big money finally taking a liking to gold, the attention is justified. Remember, a turn in the big money’s attitude towards gold must happen before gold can break through the $1,000 mark and stay there.

The excitement surrounding gold’s surge has only pushed silver further onto the back burner. (You don’t hear about any major hedge funds loading up on silver do you?) And that’s the point. Gold is hot and silver is – in a relative sense – not.

So if you want to find an investment which isn’t so hot but still has a lot of potential in an inflationary environment, you’d want to look at silver. When you do, it won’t take long to realize silver – at current levels – could easily trounce gold in the months and years ahead.

That’s right. Silver has a much brighter future than gold. All you have to do is look at the silver / gold ratio to see how potentially lucrative the situation has become.

Ratios Don’t Lie

We’ve looked at a few ratios in the past. The reason is because ratio analysis can help identify value even in volatile markets. For instance, we looked at how the gold / oil ratio was signaling oil was a buy back in January. Oil prices are up almost 50% since then.

We looked at gold / gold stocks ratio back in December. We saw that gold stocks were significantly undervalued relative to gold. Since early December, gold is up a respectable 22% while gold stocks – as a group – have rebounded 70%.

That’s the value of ratio analysis. They can quickly show you how undervalued some assets are relative to others. And if you’re able to find them at extreme points, you can get into a trade or investment with less risk and greater upside.

Right now, the gold / silver ratio (the measure of how many ounces of silver can be bought for an ounce of gold) is at an extreme and working its way back to historical norms.

The chart below shows the gold / silver ratio is slowly working its way back to a much more normal level:

As you can see, the gold / silver ratio hung around 50 for most of 2008. Then the credit crunch threw everything out of whack and now it’s slowly working its way back to normal. But this chart doesn’t show the real upside in silver. That comes from the long-run average.

Over the long term, the gold / silver ratio has averaged about 30. That means one ounce of gold would buy about 30 ounces of silver. Today, with silver at $14.60 an ounce and gold at $953, the gold / silver ratio is 65. In other words, an ounce of gold would buy 65 ounces of silver. That’s more than twice the long-run average.

Silver prices would have to double just to be in line with the long run average.

Silver Slingshot

But here’s the kicker, when gold races, the gold to silver ratio gets flipped around. During the last precious metals bull market in the late 70s and early 80s the gold / silver ratio hit lows of 15.

That means if gold goes nowhere (granted, chances are pretty slim of that), silver could easily shoot up to $50 an ounce. That’s a 400% move for silver without gold moving up a single dollar.

Here’s the thing though, gold isn’t staying where it is. Over the next few years, gold is going much higher. And silver is going to go even higher. Silver will slingshot past gold.

Think about it. With a gold / silver ratio of 15…

At that ratio, silver would be at $66 when gold hits $1,000.

$1,500 gold = $100 silver.

$2,000 gold = $132 silver.

So if you expect gold to do well, you’ve got to expect silver to do even better.

According to the historical relationship between gold and silver, if gold does well, silver will do exponentially better. In past gold bull markets, silver prices zoomed past gold in relative terms. There’s no reason to expect this time to be any different.

In Search of Value

In the end, precious metals have been one of the few sectors which have maintained an uptrend through all this. As the long run prospects for the U.S. dollar continue to worsen, I expect the uptrend to continue. However, I expect this to take a longer time to play out than most.

Just take a look at what happened earlier this week. The Financial Times reported China is continuing to buy U.S. Treasuries. Granted, they’re switching to short-term durations, but they haven’t even come close to invoking their “nuclear” option yet and probably won’t for a long while.

We’re in the midst of a slow and steady decline of the dollar. The Fed is printing dollars to fund the growing government deficits and there haven’t been any significant inflationary consequences…yet.

That will change and it’s not too late to get prepared. Now is the time to buy precious metals and precious metals miners for your portfolio. Right now, with the gold / silver ratio indicating silver as undervalued and gold a hot topic, silver is a bit more enticing.

Substantial moves like the ones that we have recently witnessed present opportunities to succeed or fail in the markets. Traders who stayed on the correct side of the trend were rewarded substantially.

Serious questions effecting your portfolio still remain:

– Have we seen the Indexes bottom or top?
– Is a reversal in the near future?
– Is it too late to go short?

Stay on the correct side of the market. Let our Trade Triangle technology work for you. It’s free, It’s informative, It’s on the money.

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. – jschulmansr

Well Mr. Obama said the same old, same old today and didn’t help the market at all… ANY of them! Mr. Obama what do you have against the market? I mean like your whole cabinet are all Good Ole Wall Street Boys!?! The Dow failed to maintain above 8000 today and that is a very bad sign or good depending which side of market you are on. It appears now the the intermediate wave (Elliott) is finished and stocks have climbed to the top of the diving platform. 1st attemp at a swan dive- difficulty easy. So wil it be a perfect 10 or a belly flop? Either Way the Dow is going down! My first target 7200-7500 and then a test of the 6500 level lows, (Called The “Bottom” recently). Gold and Precious Metals continue to consolidate getting ready to launch for a new test of $920, then $980, then the all time high. I think the news is going to be that bad and that dramatic. The Middle East is about to explode, N. Korea just threw out the inspectors, even the pirates are snubbing their noses at you Mr. Obama. So now the question is are you a man or a mouse? Squeak up! Copper is quietly having a nice rally, China is buying up all of our soybeans, and oil is getting ready to explode to the upside. Keep accumulating Gold and Precious Metals in any form, buy producers with production, you should jump into (DGP) with a little risk money too! In currencies my pick is the Aussie dollar, accumulate on dips because as Gold goes so will the Aussie Dollar. Good Investing! – jschulmansr

Get this in-depth report now, plus a gram of free gold, at BullionVault

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My Note: I use these tools and they are great and they work! – jschulmansr

Subject: Two trending markets revisited and analyzed for you

Last week I watched a video analysis of the S&P and Crude Oil markets. The technical analysis was right on at the time, but those markets have changed quite a bit in the last few days. The S&P had a huge rally and Crude seemed to steady out, so what’s the new analysis? Glad you asked!

Below are two free videos, one on Crude Oil and one on the S&P, that gives us an indepth technical look into these markets. Again the videos are free and very informatitive. Just Click on the Links Below…

Here’s your chance to analyze that stock you have been thinking about adding to your portfolio. Just enter the ticker of any company, name of a commodity, or forex pair and get your complimentary technical analysis. It cost you nothing and and no payment info will ever be requested.

Encouraging numbers from an investment banking giant dominated discussion among the pros, who tied them to massive government stimulus efforts — and doubted they would carry ahead to economic numbers, or even to results from other investment banks.

last month, a big disappointment as economists polled by Reuters had expected a 0.3-percent increase. Excluding the volatile auto component, sales fell 0.9 percent. The two prior months were revised upward, offering some consolation, but the unexpected sharp drop rattled the market.

“The inescapable fact is that the U.S. consumer is faced with daunting fundamentals: Wage and salary income growth has evaporated, credit is very tight, home prices continue to decline … [which] makes it very likely that the U.S. consumer will remain a drag on economic activity in coming quarters,” MFR economist Joshua Shapiro wrote in a note to clients. “Fiscal stimulus will help to blunt this, but is unlikely to turn the tide completely.”

Easter Mondays leave Yanks more time to leisurely ponder the week’s trading prospects, as many global bourses are closed. We get to trade – and talk, as Linda Richman used to suggest – amongst ourselves.

Gold and oil naturally figure large in this week’s scenario. Particularly, oil over gold, if you’ve been listening to commodity maven Jim Rogers. Rogers thinks the International Monetary Fund [IMF] is a likely seller of some of its 3,200-ton metal stash, so he’s talking up black gold over yellow.

It’s not as if the world finds this surprising. Whether the IMF sales take place or not, the world’s been spoiling for a showdown between the two commodities.

Let’s look at oil first. The nearby crude contract gathered strength in its 50% retracement of the February-March rally, and is now poised to challenge the run-up’s $54.64 high.

Nearby NYMEX WTI Crude

True, near-term fundamentals still indicate oversupply. The re-growth in the contango tells you that. The quarterly carry trade was pinched to 80 cents a barrel a month ago; now it’s in the $4-5 range. If you’ve got a carrying charge market, you’ve got commodity enough to carry into future deliveries.

No, this has been a rally built more on expectations of improving economic prospects – hand-in-hand with the equity market rally – than on a supply retraction. Oil inventories at the Cushing, Okla., terminus may be down from their peak, but supplies in other regions have ballooned to more than compensate for the off-take.

Now, about gold …

Momentum and sentiment have turned sour for the yellow metal. But you probably suspected that, right? The recent 30,000-contract downdraft in COMEX open interest was led mostly by fund sellers. Net long positions held by large speculators tumbled more than 18% last week.

COMEX Nearby Gold

Technically, gold’s very vulnerable. Pushed to test its 100-day moving average on the downside and weighed down by overhead resistance at the $888 level – formerly support for the February-March topping action – the nearby market’s squeezed. Gold spreads (as mentioned in “Another ‘Make It Or Break It’ Hurdle For Gold“) indicate plenty of liquidity in the lease market. Supply’s not the issue for gold either. At least not yet.

Oil’s technical strength over gold is readily apparent in the gold/oil ratio. A rising ratio, meaning gold’s price is gaining on oil’s, is indicative of poorer economic conditions to come. A decline, not surprising, signals the market’s forecast of better prospects. The ratio’s been testing the 17-to-1 level over the past couple of weeks. An oil breakout could put this indicator on course to look for support at the 15-to-1 level.

Gold/Oil Ratio

It seems traders are essentially anticipating a reflation trade by making one of the primary engines of inflation, oil, their target rather than gold, inflation’s classic beneficiary.

This should be an interesting week.

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My Note: Brad you need to remember this time the Miner’s have started to begin the rally not the bullion market. When that happens Gold always rises. But with the producer’s/miner’s leading we will have a much stronger and deeper rally this time, I’m looking for $1200 – $1500 by year’s end! Have a Great Evening, don’t forget tomorrow is National Tea Party Day! – jschulmansr

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Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –jschulmansr

Looks like the party is over! Major follow thru selling today, the Dow currently down 280 points and below 7500 at 7492. The resistance at 8000 was just to much and I think we have put in the top of this Bear Market rally/correction. As I mentioned before a lot of foolish sheeple are going to be panicking very quickly. I have been telling you to buy Gold and Precious Metals for a long time now and today’s articles will give you some more good reasons you should listen. Silver currently is flashing a Big BUY signal and when everything is said and done, I believe Silver will well outperform Gold on a percentage basis. I am using this opportunity to continue loading up on producers and I’m telling you, (CDE) Couer D’Alene Mines under a buck ($1) is looking mighty good! As always consult your financial advisor, read the prospectus, and do your due diligence before making any investments. Don’t be a “sheeple”. I also do my trend analysis thru INO.com and below is why… Good Investing! – jschulmansr – Follow Me on Twitter and be notified whenever I make a new post!

Subject: Two trending markets revisited and analyzed for you

Last week I watched a video analysis of the S&P and Crude Oil markets. The technical analysis was right on at the time, but those markets have changed quite a bit in the last few days. The S&P had a huge rally and Crude seemed to steady out, so what’s the new analysis? Glad you asked!

Below are two free videos, one on Crude Oil and one on the S&P, that gives us an indepth technical look into these markets. Again the videos are free and very informatitive. Just Click on the Links Below…

Here’s your chance to analyze that stock you have been thinking about adding to your portfolio. Just enter the ticker of any company, name of a commodity, or forex pair and get your complimentary technical analysis. It cost you nothing and and no payment info will ever be requested.

History does not repeat but it does rhyme, said Mark Twain. For an excellent

assessment of what a stock market crash can mean for the future we have only to turn to The Great Crash 1929 by Professor JK Galbraith.

It is all there, a complete repeat of the run up to the stock market crash of last autumn, and its consequences – thus far. There was the Florida real estate crash as a prelude to the main act, and then a 50 per cent plunge in the Dow Jones in late 1929, just like the one in 2008.

March rally

March 1930 saw a huge rally in stock prices. March 2009 has just given us the biggest rally since 1974 (a previous market crash year). But hold on a minute, what does JK Galbraith tell us happened next?

In 1930 stocks weakened a little in April and then moved sideways into June when they plunged down again. Then they continued falling month after month for the next two years.

Our governments know this, and it does help explain the rush to push money into the economy by means fair and uncertain. The aim is clearly to break the cycle and avoid the down trend.

But will it be successful? Nobody really knows. Is it worth trying? Yes, but the evidence so far is that the Great Recession is tracking a course that is out-of-control, or rather following a pattern last seen in the 1930s.

Perhaps we should be more optimistic, and think that something more like the 1970s ‘lost decade’ is upon us. 1974 was a terrible year for global stock markets and was followed by stagflation – a mixture of low growth and high inflation.

Inflation

Indeed, inflation is the only way to bail out an economy consumed by debt. In the 1930s debt deflation was allowed to take its disastrous course with public spending cuts and trade barriers making an already deteriorating cycle considerably worse.

However, anybody who has just bought into the stock market rally should really think about selling and staying out for a while. This is a time to park money in gold and silver and even exit cash, although you might care to note that cash and precious metals were the best performing asset class of the 70s, while in the 30s gold was the real star.

Anyone who follows the silver market knows that the fundamentals of silver are incredibly strong, long term. Since most silver is mined as a byproduct of base metal mining, and base metal prices are currently depressed by the global recession, inventories of base metals are high, and silver supply is shrinking. Many less profitable mines are closing down. Silver recently went into backwardation, which could indicate delivery problems are imminent in the physical silver market.

The US government currently holds no silver bullion at all, down from five billion ounces immediately after WWII. Above ground silver supplies are currently estimated to be one billion ounces, compared to five billion ounces of gold. This includes silver in tableware, jewelry, and other sources that will never be available on the open market.

For the purposes of this analysis, I will use SLV, the silver ETF, because it is convenient and easy to chart, but keep in mind, this is paper silver, not bullion, and its investment characteristics are completely different. It is supposed to be backed by silver bullion, but if you read the fine print, it may also hold futures, cash, and is allocated to custodians and sub-custodians which cannot be audited. It is designed to track the spot price of silver, but when the spot price of silver falls significantly below the mean, you will find that physical silver dealers will increase their premium over spot rather than drop the price. Holders of SLV cannot demand delivery of the underlying physical silver bullion bars.

On August 25th, 2008 the 50 day moving average of SLV crossed and fell below the 200 day moving average. This is know by technical analysts as the “death cross” and signifies a coming fall in price. SLV closed that day at $13.33

On October 27th, the price of SLV closed at $8.85 during the panic selling of autumn 2008, a 33.6% drop in two months.

Last Friday, March 27th, 2009, for the first time since August 25th, the 50 day moving average of SLV crossed back above the 200 day MA, which could signal a coming runup in price. SLV closed at $13.15

I don’t know what term the technical analysts use for that, so I will call it the “life cross” until someone tells me the correct term.

If SLV’s 50 day MA stays above the 200 day MA, rather than bouncing off it, this is an extremely bullish sign for SLV, and astute investors should be keeping a close eye on it for the next week. But here’s the rub.

Silver is the most highly manipulated market in existence, bar none, and the price of silver has been suppressed for many years. Gold is second to silver. The reason that silver is first apparently is that it is a much smaller market than gold, and can be manipulated using a much smaller number of silver futures contracts. Gold prices can be suppressed both by shorting gold futures, and by actual bullion sales by central banks, but these sales are becoming fewer and smaller as central bank gold reserves are reportedly running low, and even those nations with ample supplies of bullion won’t be willing to part with it at the suppressed price, now that governments worldwide are printing money like it’s going out of style.

The best body of work on silver manipulation by far is the writings of Ted Butler, available here.

Check out his articles on February 8, 2009 and March 16, 2009.

Short term traders like to follow the 12 day EMA and 26 day EMA.

On July 29th, 2008 the 12 day EMA of SLV crossed below the 26 day EMA, signaling a coming drop in price. SLV closed that day at $17.19 Three months later, SLV hit its bottom of $8.85 on October 27th , a drop of 48.4% in three months.

On December 12th, 2008 the 12 day EMA of SLV crossed back above the 26 day EMA, signaling a coming runup in price, and has been above it ever since. SLV closed that day at $10.14

On February 23rd, 2009 SLV peaked out at $14.34, an increase of 41.4% in 2 ½ months.

On March 17th, 2009 the 12 day EMA of SLV bounced off the 26 day EMA, and has remained above it ever since, a bullish sign. SLV closed that day at $12.60, and its most recent close on March 27th was $13.15

If the 12 day EMA can stay above the 26 day EMA, look out above!

The following chart shows the long and short positions of various commodities on the Comex as reported by the CFTC for the week of March 16, 2009. Thanks to Mark J Lundeen for the chart. It shows that the net long/short position in silver is 100% short, compared to gold at 63%. I would consider this as prima facie evidence that the CFTC is not doing their job in preventing manipulation of the commercial silver market.

GATA Board of Directors member Adrian Douglas, editor of the Market Force Analysis letter (http://www.marketforceanalysis.com/), has combined data from the U.S. Commodity Futures Trading Commission and the Office of the Comptroller of the Currency to show that the suppression of the prices of gold and silver in the last several years correlates exactly with the growing concentration of the short positions held by two U.S. banks, JPMorgan Chase and HSBC.

Short of the official admissions of the gold price suppression scheme collected and published by GATA over the years, Douglas’ report is probably the best proof yet, and certainly the most detailed. Douglas’ report is titled “Pirates of the COMEX” and you can find it in PDF format at GATA’s Internet site here:

GATA’s supporters may be wearying of our many similar requests, but only persistence pays off, so we ask you to print copies of Douglas’ report and send them — by regular mail, not e-mail, which is ignored — to your U.S. senators and representatives with a covering letter requesting an explanation as to why nothing is being done to stop this market manipulation. For our friends outside the United States, please send copies with similar letters to your own national legislators.

“Nothing will unnerve the paper gold shorts more quickly and do more to undercut their confidence than to strip them of the real metal and force them to come up with more hard gold bullion to make good on deliveries. “Stand and Deliver or Go Home” should be the rallying cry of the gold longs to the paper gold shorts.” –Trader Dan Norcini

I think it’s time for a “short squeeze” and take back some of the money the “pirates” have stolen

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –jschulmansr

My apologies for the 2 day gap in posts, was attending some high-level economic conferences and was unable to make any posts. Well the rest of the retracement has occurred for the Stock Market so we are at a citical juncture here. Personally I think this is a huge Bear Trap. It is a pretty normal bull retracement in a bear market. everyone wants to believe the bottom is in and I better get in now while I can before I “miss” it. Everyone keeps forgetting what is about to happen. The dreaded “I” word. The hidden tax on all of our money, inflation. If you listen carefully the ones “in the know” are already preparing for it. Today’s first article shows the fact that inflation is coming and our biggest holder of U.S. debt is growing very concerned. On the gold and precious metals charts we are seeing a drop today which I think is mostly exuberance spilling over from the stock market with investors seeling some of their Gold to play the Stock Market. We may have a head and shoulders forming after a double top which would be bearish for Precious Metals and convince a lot of weak knees to give up and exit out of the markets. However I think this is going to be a reverse of the Stock Market and prices are consolidating while waiting for the buig Inflation shoe to drop. For my own portfolio I am hanging tight and using this as an opportunity to accumulate more shares in the Precious Metals Producers, and also slowing shifing some funds back into Oil related investments. One market that has some real potential soon will be Natural Gas as it has been lagging so far behind Crude and Gasoline. Be Patient and choose wisely! On that note I have recently found and became a member of INO.com. With their patented “triangle technology” trend analysis has never become easier! INO TV offers free – yes that’s right Free trading courses, news and video delivered right to your computer screen. INO Market Club offers brand new talking charts- charts that actually talk to you! Awesome! Good Investing! – jschulmansr

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China proposed yesterday a sweeping overhaul of the global monetary system, outlining how the U. S. dollar could eventually be replaced as the world’s main reserve currency by the IMF’s Special Drawing Right.

The SDR is an international reserve asset created by the International Monetary Fund in 1969 that has the potential to act as a super-sovereign reserve currency, said Zhou Xiaochuan, governor of the People’s Bank of China.

“The role of the SDR has not been put into full play, due to limitations on its allocation and the scope of its uses. However, it serves as the light in the tunnel for the reform of the international monetary system,” he said.

Mr. Zhou diplomatically did not refer explicitly to the U. S. dollar. But his speech spells out Beijing’s dissatisfaction with the primacy of the U. S. currency, which Mr. Zhou says has led to increasingly frequent global financial crises since the collapse in 1971 of the Bretton Woods system of fixed but adjustable exchange rates.

“The price is becoming increasingly high, not only for the users, but also for the issuers of the reserve currencies. Although crisis may not necessarily be an intended result of the issuing authorities, it is an inevitable outcome of the institutional flaws,” Mr. Zhou said.

Jim O’Neill, chief economist at Goldman Sachs in London, said “over time, as the world is taken off the steroids of the over-leveraged U. S. consumer, you can’t have the same dollar dependence as we have had. But who can provide it? And the answer is, if it functioned properly, maybe the SDR could have a much bigger role,” he said.

A super-sovereign reserve currency would not only eliminate the risks inherent in fiat currencies such as the dollar — which are backed only by the credit of the issuing country, not by gold or silver — but would also make it possible to manage global liquidity, Mr. Zhou argued.

“When a country’s currency is no longer used as the yardstick for global trade and as the benchmark for other currencies, the exchange-rate policy of the country would be far more effective in adjusting economic imbalances. This will significantly reduce the risks of a future crisis.”

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My Note: If you read between the lines, this does not bode well for the Treasury and Fed Debt offerings which will have to be issued to pay for all of the bailout, Tarp, and economic stimulus packages. This also doesn’t bode well for the U.S. Dollar in particular, but the other currencies also. As the largest holder of our debt, China is not happy about their investments losing value as the dollar depreciates. Next, China along with Russia are both buying and adding to their respective gold reserves! They are expecting massive inflation, why are we not hearing any talk about that in the nightly news?-jschulmansr

In a recent column (“Gold Traders Whipsawed” at), we said we’d let you know when the gold/mining stock ratio tipped in favor of the miners. Well, we’re telling you now. The GLD/GDX ratio decisively broke through its 200-day moving average late last week.

The SPDR Gold Shares Trust (NYSE Arca: GLD) is a grantor trust affording its holders an undivided interest in vault bullion. The Market Vectors Gold Miners Index ETF (NYSE Arca: GDX) is a portfolio comprising nearly three dozen mining issues. With GLD’s price in the numerator, a decline in the quotient represents appreciation in gold stocks relative to gold itself.

Both bullion and mining shares are higher for the year – GLD’s up 8.2% and GDX has risen 10.8% – but the momentum, for now at least, is with equities. Buoyancy in the broader equity market is providing lift for the miners, but it’s good to keep in mind that there’s a 75% correlation between GDX and GLD. Gold is, for the most part, gold.

Gold’s rising price has a leveraged effect on the stocks, as every dollar above a miner’s production cost flows to its bottom line.

Is this the time to buy miners? Well, if you believe there’s more upside in gold (keep that correlation in mind) and want to ride the draft of the current equity market rally, perhaps. Taking a whack at GDX removes some of the stock-picking risk.

Reflation Update: The Real-time Inflation Indicator spiked 1.3% higher last week, reaching a level not seen since January.

In the wake of the Fed’s announced record monetization, some gold bugs remarked about the significance of the date and decision. Moreover, the airwaves were littered with commodity bulls (not the familiar faces). There were a few non-gold bug analysts on live television showing currency from Zimbabwe and relating the Fed decision to what has transpired in Zimbabwe. Hyperbole aside, Fed policy of currency debasement and inflation of the money supply is hardly anything new. News is important in that it highlights and reinforces trends. It doesn’t create them.

Keen market watchers and seasoned Fed observers were hardly surprised at the Fed action. We all knew it was coming. The question was when. Remember, news highlights trends. Commodities had been forming a bottom for five months. Just two weeks prior we wrote about our positive near term view on commodities. How about Gold? It rose from trough to peak over 40% in just four months. It seems that only the shorts were surprised.

Now to expound upon last week’s missive, reflation isn’t always so advantageous for the precious metals, especially gold. That holds true for both the economy and markets. With stocks and commodities now recovering, money is to be put to work in those markets and also potentially diverted away from gold. We aren’t expecting a full-blown correction in Gold but rather a consolidation that, for a matter of time diverts attention (like an idling engine) away from itself as it prepares for major liftoff.

This is a temporary respite in a bear market and in an economy stuck in deflation. The first period of deflation (and strengthening dollar) in the Great Depression lasted three years. The Yen increased nearly 100% from early 1990 to early 1995. This bout of deflation isn’t even one year old yet. In other words, don’t expect commodities to enter a cyclical bull market anytime soon. There isn’t enough demand on the horizon. The recession and accompanying deflation should last into 2010. It may be a while before both run their course, thereby allowing an inflationary recovery to begin in earnest.

In conclusion, be aware that the current rebound in stocks and commodities, though large, is just a temporary recovery. A single news event won’t change that nor alleviate the current deflationary pressures on the economy. Finally, holders of gold and gold shares should be patient. The major breakout will occur this year, though not within the time expectations of the gold bugs.

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My Note: When Gold and Precious Metals prices do take off and they will, it will be faster than anyone has anticipated. Use this time to buy now, increase your holdings. -Good Investing – Jschulmansr

Get this in-depth report now, plus a gram of free gold, at BullionVault

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Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –jschulmansr

Today Gold dropped $27.70 down to support at the $885 – $890 levels. We need to ask ourselves why? I would like to propose that we are absolutely being “Scammed by Uncle Sam!”. Let me explain… Again today Gold Lease Rates (1 month) are negative. “So what’s the big deal about that?” you are asking. The big deal is this, when the lease rate is negative it means that someone will actually pay you a fee in addition to giving a Gold loan. Now you or I or anybody with a sane mind is not going to make a loan to you for a fee (they have to pay), to borrow Gold from them. This doesn’t even count the risk of never being repaid and losing the Gold! However, (and you can read more detail in today’s first article); this provides a way for someone to supress Gold prices if they wanted to, and you guessed who – “Scammed Again By Uncle Sam”. While the first article today explains “the how”, I am going to venture the “why”. Right now if you pay attention to what is going on, the U.S. and the Fed desperately need to appease some large holders of our debt and dollars by making a way for them to convert their dollar holdings into Gold. They also realize that their current (US) monetary policies are going to force Precious metals prices (especially Gold) much higher than today’s $1000 level while at the same time deteriorating the value of the U.S. dollar. By supressing the price of Gold temporarily the Fed and Treasury will benefit as follows. First as the foreign holders sell off their Treasuries and Bonds this creates a demand for U.S. Dollars to fulfill the transactions. This in turn brings those Dollars back into our economy helping to create more liquidity. Now depending on the velocity of money, that can be in itself inflationary. However with the velocity of money being dependent on Capital Investment, what are we currently seeing? Right now there is no real demand for new goods and services, which means that there is no real incentive to invest in New Factories, Expanding current production levels, or even opening new businesses. So then what happens? The holders instead of sitting on their dollars look for safe places to park those dollars until the economy turns around again. Where do they park the money, banks have proven to be risky?, the stock market? even riskier still, so they park their money in a “safe haven”, buying up Treasuries and Bonds. This helps to offest the selling pressure on Treasuries caused from the original U.S. Debt holder’s sales, and it also creates further demand for U.S. Dollars. With the unprecendented spending currently going on by Mr. Obama and cohorts, the Fed and the Treasury needs to create an increased demand for all of the new Debt Issuances coming into the market. ( They are also creating further false demand buy buying up their own new debt (300 Billion purchase just announced today). In my mind these purchase in the long term will also create more inflation. So currently the U.S. government has every reason to keep trying to artificially depress the Gold Prices. Sooner or later however their Gold price manipulation will explode in their faces as already seen in a smaller degree, the demand for Gold is snatching up all of the physical gold being dumped. That is why we will bounce off of these price levels for the fourth time. When it breaks and when inflation (already here- currently running 8% to 15%) is officially acknowledged,watch out Gold will shoot up like the latest Space shuttle launch! Use this limited time frame to keep adding to and accumulating your long positions in Precious Metals- Good Investing! – jschulmansr

ps- For complete details and Information on how Gold Prices are being manipulated and the Silver market also- go to GATA.org.

pps-****NEWS FLASH****

Gold is now up $26.60 New York Spot at $942.50 after Fed Announcement of Leaving Interest Rates Unchanged!

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On Friday, March 6, gold lease rates turned negative for the day. What that means is that anyone who wanted to lease gold would actually be paid a fee in addition to getting a free gold loan.

No sane person would choose to lose money loaning physical gold, in addition to the risk of never getting the gold back from the other party. However, if someone (such as the U.S. government) wanted to suppress the price of gold, this is one tactic to try to accomplish that purpose.

I can come to no other conclusion than that a large quantity of physical gold surreptitiously appeared on the market on March 6 with the sole purpose to drive down the price of gold. The quantities were large enough that they almost certainly could not come from private parties. With most of the world’s central banks now being net buyers of gold reserves, they would not be the source of this gold. By process of elimination, the suspicion falls upon the U.S. government as the ultimate party responsible for this blatant action to manipulate the price of gold.

Of course, the U.S. government would not want to be identified as the cause of this leasing anomaly. Instead, such manipulation was almost certainly conducted by multiple trading partners of the U.S. government.

This sledge hammer tactic worked at driving the price of gold further away from the $1,000 level – at least temporarily. Last week, spokesmen for a number of troubled U.S. companies were suddenly issuing statements about a return to profitability (such as Citigroup and JPMorgan Chase) or not needing further government bailouts (such as General Motors). Stock values climbed as gold’s price retreated.

But (and there was always a but), these massive efforts to suppress the price of gold seem to be running out of steam. First off, these “positive statements” had serious qualifiers such as the chairman of Citigroup claiming that, ignoring extraordinary items like bad loans, the bank earned an operating income in the first two months of 2009.

Then insurance company AIG bowed to pressure and revealed that a huge portion of the $150+ billion in bailout funds it had received had really been passed along as bailout money to other companies (including Citigroup and JPMorgan Chase). In fact, almost all of this money was redirected to the U.S. government’s trading partners who probably have been complicit in the manipulation of the gold price.

Once the public learned that such companies have received more federal government bailout money that previously revealed, the stock market rally stalled. The price of gold started to recover. Unless the U.S. government can come up with another tactic quickly, I expect the price of gold to generally rise over time.

In the meantime, demand for physical gold has taken off again. The U.S. Mint is so far behind at meeting demand for bullion gold and silver American Eagle issues that it last week announced an indefinite suspension of plans to strike 2009-dated proof and uncirculated versions for collectors. Even further, the U.S. Mint also announced that it would not even accept orders from primary distributors for any gold or silver Eagles this week.

On the wholesale market, supplies of gold and silver American Eagles quickly disappeared. The premiums of these coins shot upward. Some retailers now have to decline orders as they don’t know when they might be able to fill them or what premiums they will have to pay to acquire merchandise. My earlier prediction that by the end of April it would become almost impossible to find any physical gold or silver bullion-priced items for reasonable delivery is starting to come true.

At the American Numismatic Association’s National Money Show in Portland, Ore., this past weekend, demand for U.S. gold $10s and $20s was still solid. With some such collector coins now trading at all-time high prices, however, some dealers are advising their customers to consider selling or swapping for gold bullion. As a consequence, I think most of the surge in prices has already occurred. It might be a good time to take a profit.

The Federal Reserve announced today that they will join the central banks of England and Switzerland, printing money out of thin air to buy long-term government debt so as to keep interest rates low and boost lending in their ongoing attempt to revive an economy that is faltering badly due to an orgy of credit and debt a few years ago.

Apparently the gold market and currency markets have heard the news (the chart to the right will be updated as needed over the next hour or so – update #1 from $925 to $932 already complete).

The printing presses will be working ’round the clock to fund purchases of up to $300 billion in long-term Treasuries over the next six months which, in combination with an increase in purchases of mortgage backed securities and agency debt also announced today (an additional $850 billion total), should see the Fed’s balance sheet swell to once unthinkable levels.

Lest anyone think that any of this is getting a bit out of control, the central bank also provided assuring words that they will keep an eye on the “size and composition” of their balance sheet in light of economic developments.

In what appeared to be just an afterthought, relegated to the third paragraph after occupying the top spot for years, the Fed also announced that short-term interest rates will be left at the freakishly low level of between zero and 0.25 percent and that they won’t be going up anytime soon.

And if this doesn’t work, we might just see the Fed’s balance sheet hit that $10 trillion level that someone mentioned the other day.

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“Nothing will unnerve the paper gold shorts more quickly and do more to undercut their confidence than to strip them of the real metal and force them to come up with more hard gold bullion to make good on deliveries. “Stand and Deliver or Go Home” should be the rallying cry of the gold longs to the paper gold shorts.” –Trader Dan Norcini

My note: Only one answer to being scammed buy more! Please take advantage of the price now, they may try to bump it down one more time, but we are going back and testing all time highs $1050 level, if a “short squeeze” develops then $1250. Jump aboard now! -Good Investing – jschulmansr

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Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –jschulmansr

Wow! again what a week in all of the markets. Gold is continuing to slowly build into a major rally, look for $1050 to go down this time! We have seen the retracement in the stocks (normal retracement) in a very bear marketas I also mentioned earlier. I still have my 720 Sp 500 puts and look for a nice pop before next weeks expiration. Continue to accumulate more mining stocks and I hope you got in to DGP when I did and let you know via twitter on Monday. The winner if you haven’t guessed is Gold! We have a new player entering into the melee. Crude Oil has finally flashed it’s first buy signal in 18 months. Look for strong resistance at the $50 mark. If it clears then we’re back to $80 minimum, probably $100 in the first leg. I would play this one slowly as there still is a huge pool sitting out there in tankers to be used up first before we can get into a serious rally in Crude Oil and distillates. One thing to mention is our President Obama, at least he waited until the close of markets before speaking yesterday, it almost seems he is determined to drive the stock markets down. If the Dow doesn’t hold here then the 5000 range for the Dow is not out of the question in fact a very real possibility; a full 70% retracement would actually take us down to the 4500 level. Protect yourself and Buy Gold any form and BUY it NOW! Good Investing! jschulmansr

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For the first time since September of 2007, the crude oil (NYME_CL) market has flashed a positive signal that it is headed higher. This is the first buy signal that we have seen in over 18 months in the energy markets.

The big question is, if crude oil is headed higher, how much of a price increase can the US economy afford and withstand?

Here is a raw commodity that is used by everyone and the US has no control over. This key commodity to commerce just happens to be in areas that are normally hostile to the US. If we see a hiccup in the supply chain that changes this market dynamic, even for a short time period, we could see oil move back to the $80/barrel range in a heart beat.

So how will this affect the US equity markets? If crude oil heads back to the $75-$80 range, I expect that the major indices will head south. I call it the 551 syndrome. 5000 on the Dow, 500 on the S&P 500, and finally 1000 on the NASDAQ.

In this short video I will share with you the potential target zones we could see in the next 6 to 12 months in crude oil.

So with the trend in crude oil in a positive trajectory and the trend in the US equity markets in a negative trajectory, I think the two will feed off themselves. Look for traders and hedge funds to move aggressively in both these areas with abandon.

Lastly with no reinstatement of the up-tick rule, expect stocks to once again get pummeled to oblivion.

“Forceful relaxation” – it brings to mind a trader at a Mexican beach resort, not Swiss monetary policy, but that is exactly what the Swiss National Bank (SNB) announced in its Monetary Policy Assessment Wednesday, joining a growing chorus of central banks engaging in quantitative easing. Sell the franc and buy gold.

The SNB cut its target range for three-month Libor by 25 basis points to a range of 0–0.75% and announced plans to purchase domestic bonds from the private sector and sell francs in the open market. The resulting biggest ever one-day drop in the franc versus the euro and dollar is likely to be followed by franc depreciation over the next year.

Swiss lending to foreigners brings new meaning to Lord Polonius’s advice to Laertes to “neither a borrower nor a lender be.” The Swiss risk losing more than the friendship of the Hungarians who borrowed extensively in Swiss Franc between 2006 and 2008. They also risk losing their money as Eastern Europe struggles under a mountain of debt. All told, Swiss banks claims on foreigners rose from five times Swiss GDP in 2000 to roughly eight times GDP in mid-2007, according to the Bank for International Settlements (BIS).

The majority of these claims are denominated in US dollars, and that factor will continue to put pressure on the franc versus the dollar over the next year. Swiss banks’ net US dollar books approached $300 billion by mid-2007, according to the BIS.

Now that the SNB is actively trying to push the franc down to raise inflation expectations in Switzerland, watch out. This policy raises the prospects for franc depreciation and increases the case for owning gold versus all reserve currencies.

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Related: This is one of a multitude of reasons to Buy Gold-see next article below – jschulmansr

The Swiss National Bank moved to weaken the Swiss franc on Thursday, the first time a big central bank has intervened in the foreign exchange markets since Japan sought to weaken the yen in 2004.

The bank’s move, which sparked fears that other countries could follow suit, comes as the value of the Swiss franc has soared as investors seek a haven from the recent market turmoil. In October, after the collapse of Lehman Brothers, it rose to a record high of about SFr1.43 against the euro, a level it has come close to again in recent weeks.

But it fell to its lowest level this year on Thursday after the SNB said the currency’s strength represented an “inappropriate tightening of monetary conditions” as it battled against a slowdown in the Swiss economy.

“In view of this development, the SNB has decided to purchase foreign currency on the foreign exchange market to prevent any further appreciation of the Swiss franc against the euro,” the central bank said.

The Swiss franc dropped 2.6 per cent to SFr1.5192 against the euro and dropped 3.2 per cent to $1.1894 against the dollar.

Analysts said the move was likely to increase talk that countries were set to engage in a bout of competitive devaluation.

Countries around the world faced with the constraint of zero interest rate levels might feel it was acceptable to intervene to weaken their currencies in order to ease monetary conditions, he said, adding that other export-dependent economies such as Japan would “probably be at the head of the queue”.

Michael Woolfolk at Bank of New York Mellon agreed.

“Market intervention by a major central bank such as the SNB opens up the door for other central banks, namely the Bank of Japan, to follow suit,” he said. “The yen is widely perceived in Japan to be overvalued.”

The SNB also cut its interest rates by 25 basis points, taking its three-month Libor target range down to zero to 0.75 per cent, and announced plans to adopt a quantitative easing approach to monetary policy.

Analysts said the move towards quantitative easing was sparked by a drastic revision to the central bank’s forecast for growth, which is now expected to fall between 2.5 and 3 per cent in 2009, much worse than its previous forecast of a drop of between 0.5 and 1 per cent.

The SNB said economic conditions had deteriorated sharply since its last policy meeting in December and that there was a risk of deflation over the next three years.

Is gold the next “hot” investment? Or will it never break through the $1,000 threshold?

Some of the world’s leading investors are currently placing their bets.

For instance, hedge fund manager David Einhorn recently bet big on gold. Einhorn manages $6 billion at Greenlight Capital and has averaged a 20% annualized return by booking only one losing year since 1996 (last year). His fund recently bought more than $200 million of SPDR Gold Trust ETF (NYSE:GLD) and more than $75 million worth of Market Vectors Gold Miner ETF (NYSE:GDX).

On top of that, the big money managers have already pumped billions of dollars directly into gold mining companies to fund takeovers and new mines and expansion.

It’s looking like a lot of smart and big money is betting on gold. And as the financial markets, economy, and future outlook worsen, gold is holding up as a last bastion of hope for many investors.

How can you get in on it? Is it just gold? What about silver? Where are the real values to be had? What about other hard assets – water, agriculture, etc.?

It’s best to start getting prepared now.

Most recently, Q1 Publishing’s own Andrew Mickey, editor of the Prosperity Dispatch, had a private one-on-one conversation with John Embry, one of the leading gold investors in the world.

Embry has been following the gold sector for 35 years (that’s since the early 1970’s) and is one of the leading authorities on gold. Embry is currently the Chief Investment Strategist for Sprott Asset Management – a legendary name to long-time gold investors.

Prior to joining Sprott, Embry oversaw more than $5 billion in assets including the Royal Precious Metal Fund as VP, Equities and Portfolio Manager for RBC, a top-tier Canadian bank. Under his watch, the Royal Precious Metals Fund returned 153% in 2002 and was ranked #1 across all funds in Canada (remember 2002 was a horrible year for stocks as tech stocks continued to fall).

Andrew Mickey: Precious metals have been getting a lot of attention lately. But it seems like there has been a divergence between gold and silver. We’ve been watching the gold to silver ratio (the number of ounces of silver which can be bought for an ounce of gold) get wider and wider. Gold to platinum too. Do you see the divergence tied to the industrial aspect of metals like platinum and silver, gold is the supreme precious metal, or is there something else going on behind the scenes?

John Embry: No – it’s a very strong manipulative aspect at work. If you go to the COMEX and look at the trading patterns and the short positions and such, clearly the prices are being messed around with.

Silver is a smaller market and can be messed around with more easily. I think silver probably has a bit more upside potential because the price is so far behind where it should be.

Andrew Mickey: So do you see silver as one of the bright spots?

John Embry: Oh yeah, it’s an extreme bright spot. I could easily see it three times where it is now in the not-that-distant future.

Andrew Mickey: As far as gold supply, there is one period in the world gold supply where gold production kind of crested around 2007 or 2008. Are we facing a “Peak Gold” kind of situation?

John Embry: Yeah, we have most assuredly crested in terms of mine supply without question.

Andrew Mickey: So, when you look at five, ten years out…let’s say in a world where gold is $2000 or $3000 or higher, how much more gold can realistically be produced in a year?

John Embry: Zero, I think. In fact, I think you probably need a lot more lead time – maybe five to ten years.

Just look at what happened in the ‘70s. The gold price went from $35 to $800 and, believe it or not, gold production was at a lower level worldwide after that 10-year period.

Now, the big question is what will happen this time? Number one, a lot of the existing mines are being depleted quite rapidly. Number two, when the gold price goes up a lot, mines generally tend to sort of drop the grade they mine because they can make a lot of money with lower grade and they can keep the good stuff for the bad times.

So by definition, they will be mining in the same number of tons but they will be taking the gold grade out of it, so collectively they will be mining less gold. They will make more money because the price is up but they will be mining less.

The other problem is that so many of the new interesting deposits that may or may not be developed in the future are located in these God-awful third world countries. They are having a real battle now with the governments, getting permitting, deciding who makes the money out of the mine, environmental issues etc. The gold deposits are all over the place and the governments are going to delay projects.

Say you find an ore body today. It would probably take a minimum of five years before the gold hits the market with all the attendant problems there are getting it into production. So all that’s already baked in the cake. The gold price could be doing anything it wanted for the next four or five years…gold production isn’t going to increase much – if any – at all.

Andrew Mickey: Amazing, gold production declining in the last great bull market for gold. So what does this mean for gold stocks, from your perspective? Where should we focus our investments across the whole range – from explorers all the way up to the majors?

John Embry: Right now, I think the majors are reasonably priced compared to the overall list. People have sort of focused on liquidity so they have gone after the majors and they bid them up aggressively and left a lot of the more illiquid situations behind.

That will all change. As gold becomes more popular and the price rises, at that point, money will filter down the food chain from the larger companies and they will go looking for the good quality smaller ones.

I particularly like some of the smaller producers now for a lot of reasons.

For one, they are going to make a ton of money in the current environment, particularly if they are producing outside the United States. Like some of the ones that are producing in Canada. The gold price yesterday was I believe $1,230 Canadian.

Another reason is because all of the costs of gold mining are dropping right now. Energy costs, steel prices, and all the things that went up so much and really hurt gold miners’ profitability. They are all going the other way now and at the same time the price of gold is going up. So I think that people are going to be pleasantly surprised going forward by the profitability of some of these mines, which have struggled up until recently.

So I am pretty bullish on small producers and anybody who has got a legitimate ore body that can be exploited sometime within the foreseeable future. I think they are going to be viewed positively too.

But the key thing to focus on is when their production will begin. If they don’t have to worry about getting through the environmental hurdles and getting the finance and et cetera, et cetera, they are going to make a lot of money.

Andrew Mickey: What do you see as the potential risks of politics and environmental concerns preventing anyone from starting production?

John Embry: They are not necessarily preventing a company from going into production, but they are certainly delaying it.

My favorite example is that probably the best ore body that’s been discovered in the last 10 years is Aurelian’s in Ecuador; which was subsequently acquired by Kinross (KGC). But the fact is, as long as the current government in Ecuador stays in power…I just don’t see the thing entering production.

So that’s what I am talking about. It’s such a fabulous mine if it were in a good geopolitical environment. It would be being built as we speak, but there is no progress towards building it at this point.

Andrew Mickey: The gold ETF (like the GLD) has been the number one recommended way to invest in gold in the U.S.

It’s a hot subject of debate by those who are new to gold and those which have been following it for while. The new people to gold always recommend the GLD. What are your thoughts?

John Embry: Well, they are just plain wrong in my opinion.

I think gold and silver are the ultimate insurance policy. When things got really bad in the system you want to make sure the vehicle you own has the gold and silver that it allegedly is supposed to have.

Now, I may buy gold and have it in my own possession. I know I have it. And then there are other gold and silver vehicles like Central Fund of Canada (NYSE:CEF) or Central Gold-Trust (NYSE:GTU), to cite a couple, where the gold is allocated. It’s in a vault and there are regular audits to prove everything that’s behind the vehicle is in fact there. So you are getting what you pay for.

Now, in the case of the ETF I am not totally sure. I mean if you read their prospectuses closely enough you’ll see there is some wiggle room. What they are trying to do is just track the gold price so you don’t necessarily need the physical gold. They could be using paper derivative types of products to back the stock.

What really made me kind of uncomfortable recently, was there was this dramatic ramp up in the amount of money going into the GLD ETF in particular. I looked around and I am going like, where is gold coming from?

As you know, the gold market is acknowledged by virtually everybody to be tight. I know mine supply is falling, I know that – I didn’t see any appreciable change in any of the inventory levels or any of the recognized exchanges like COMEX etc., and there was no particular acceleration in the Central Bank dispositions. So my question is, if suddenly all this new buying appeared because of the ETF having to sort of stock up, where did the gold come from?

I am not sure it bought any gold. I think they might have gone to COMEX and just bought a paper contract.

It’s a crazy time. What’s your take? What going on in the general markets and where are we headed?

John Embry: I think we are probably headed for the worst economic debacle since the Depression – if not worse than that.

And the response for that by governments around the world is going to be, I think, a blizzard of paper money creation. They will run massive deficits, trying to prop up these economies.

So I think the major development is going to be ongoing issues of currency debasement. The value of paper money against real tangible assets is going to fall considerably. Right now, we are going through this deflationary scare. It won’t last. It will change into a hyperinflationary environment in the not too distant future.

Andrew Mickey: A kind ofstagflationary situation like we saw in the 1970’s?

John Embry: No, worse than that. I think the inflation would be more intense. The decline in economic activity will probably be worse.

Andrew Mickey: What are the kinds of conditions that bring us to that state? Is it avoidable?

John Embry: Basically, we have already put the conditions in place. We ran economies with constantly too much leverage and debt.

Eventually, you reach a certain point where you can’t really add any more debt because the capacity for the system to handle it has been exhausted. Once it reverses, it’s very hard to change. They are going to try to change it by simply debasing the money.

Andrew Mickey: You seem to focus on the debasement of currencies as a government “solution” – for lack of a better term – to the problem. What are some of the best ways to protect ourselves from this situation? Which are you employing?

John Embry: Our strategy is pretty simple. What we really like is the monetary precious metals gold and silver. We don’t like anything in the financial sphere at this time. The companies that we like are the more solid companies providing basic services and what have you. We like the ones which don’t have overly leveraged balance sheets.

Andrew Mickey: What about other real asset classes. There are other sectors I know you follow outside of precious metals like agriculture. That’s the one thing that I’ve been completely excited about for years, but had to turn and run from over the summer. What’s your take on it now? Is it time to wade back in?

John Embry: Well, I am with you on agriculture. It’s a necessity that we must eat.

I guess one of the positive aspects of global growth is that the third world became a bit more affluent. Improvement in their diets put more demand into the world for basic food stuffs. Now that’s slowed down a bit.

I think the real arbiter in the short run might be the climate. I see a lot of industry people bringing this up, changing sunspots. These changes in the sunspots suggest that we may be facing drought conditions in a lot of the world all at the same time.

If that’s the case, I think you are going to see massive food shortages which would underrate a considerable price appreciation in the food because there will be a real fight for it.

Andrew Mickey: So, I don’t want to get too technical with this subject, I assume that you’re referring to increasing activity in sunspots?

John Embry: Yes, there is increasing activity in sunspots; which apparently, sort of cools the world out. It’s really interesting because there has always been, as you know, there is debate about global warming.

I do believe that all this carbon release is creating global warming, but at the same time, we have this mass of long cycles in nature which sort of move from the ice age then back to a period where it gets too hot. In that cycle, we are headed towards cooling again and the sunspot is just one aspect of it.

Andrew Mickey: Can the sunspots cause some of the farming areas to change?

John Embry: Yes, they do. They have a role – for whatever reason – they have a major impact on increasing odds of getting hit by a drought. We have a lot of droughts going on in the world currently. There are droughts in Australia, South America, Northern China and Africa. But Africa has always had a drought.

There is a lot of food supply interruption. If a drought were to strike North America then that would really create a problem. I have seen some work suggesting that we are due for a drought based on certain cycle work.

Andrew Mickey: Okay, this is more or less an agricultural cycle that you are referring to I imagine. How long is this kind of agriculture cycle? Is it like an 80-year almost Dust Bowl scenario type?

John Embry: Well, yes…I hesitate to go there because…it’s like Murphy’s Law, “everything goes wrong at the same time.” And with the financial world right now in a mess the last thing we need is a sort of replay of the ‘30s in the agricultural space.

The pessimists among us think that there is a good probability that drought conditions could strike North America, and that would be the last thing I want to see.

Andrew Mickey: What about farmland then? It’s an asset class which has had extremely consistent returns over the past 50 to 60 years. But, we’ve been waiting for a time like this.

John Embry: Farmland prices have fallen off a cliff. I just saw a guy in Minneapolis; again, he was saying that farmland is on offer everywhere right now.

This is a great thing. I am now in favor of buying farmland at the right price and that price is probably – as we are cleaning this whole mess up – the right price is going to be reached.

Andrew Mickey: The same is true for all kinds of natural resources. Oil, natural gas, copper, iron ore, uranium, etc. They’re all over the world and the government s which control them are in position to really inhibit or assist private companies who want to exploit them.

Recent US policy changes favor certain alternative energies. The one that really concerns me is uranium. In your opinion, when we look at uranium, should we look at it as declining uranium supply from current mines and or how new power plants can come on line if they can’t get it? Which is the real problem? Or is it both?

John Embry: Excellent question. I do think there is a problem. The Cigar Lake up in Northern Saskatchewan has gone through all sorts of problems. Another major problem area is with the Olympic Dam mine in Australia. It has been having problems too.

So again, there’s an issue with existing production.

In that light, I think that’s going to make new discoveries. Quality discoveries in uranium which are really worthwhile and the problem, again, is how long it’s going to take to exploit them. There just aren’t too many good deposits. We had that huge run in uranium a couple of years ago, but a lot of the deposits were really junky.

The great advantage in uranium is that the true cost of producing the power, is in building the reactor. So, there’s a lot of flexibility there. They don’t care about what they have to pay for uranium just as long as they can get it.

So I think that’s one of the aspects I like about uranium. The price is sort of inelastic in that sense. Just because the price goes up doesn’t mean it’s going to start to reduce demand.

Andrew Mickey: With respect to potash, nitrogen and phosphate, where do you see opportunities there? Most people are familiar with potash, the high capital costs to build a mine and the like. Are there any opportunities in nitrogen and phosphate because it’s too easy, how do you guys kind of look at those

John Embry: Well, we actually – we meaning our Sprott Resource Corp – have been looking around for interesting opportunities in phosphate and what have you. We believe that as this whole agricultural thing unfolds that it will be a good business.

But right now, farmers are having trouble getting money like everybody else is. So really, there is a bit of a low in the fertilizer business. Looking for longer term opportunities, the short term is going to be a little problematic.

Andrew Mickey: Are there any other things that you think individual investors should keep in mind as this is the first time in a long time that any of us had to go through a downturn like this?

John Embry: Well, it’s downright ugly out there. I was born in United States and I am a huge admirer of the U.S. I think what’s happened is tragic. Consequently, people are looking to protect themselves and I really do think that precious metals in particular and solid commodity opportunities are going to be one way that’s going to pay off in the end.

Andrew Mickey: What’s your take on all the stimulus packages and infrastructure building and everything that’s going on there?

We have been really bearish on infrastructure companies. How can the government support these businesses which are mostly private?

John Embry: I think that you are right. Typically, the market overacts to these things and obviously the infrastructure spending is partly implied; because, it’s been neglected to such a great extent in North America.

We have the same problem in Canada. Our roads are falling apart. Really, they could spend a ton of money in the sector. Problem is, they don’t have the money. They are going to have to create it out of thin air.

Andrew Mickey: One last thing. Are you currently looking at or investing in water? If so, would you be looking into water rights or a pipe manufacturer for example?

John Embry: We haven’t done as much as we should have. I think water is going to be a major issue going forward.

As for ways to invest in water, I’m more interested in water rights. The good thing about Canada is, there is lots of water up here. The problem is going to be down in the U.S., particularly in Southwest and other areas. I just look at that and I shake my head.

Andrew Mickey: Well, thanks very much for spending some time with us. Is there anything else that you would like to add?

John Embry: Just that I think that it’s important that your readers know all this. The world is a lot different than it was 10 years ago.

Andrew Mickey: And probably it will be a lot different in another 10 years.

John Embry: Well, it would be a lot different looking back from five years from now too, you bet, but I think we will be stood in good stead, certainly being in precious metals and end products, I think those are the two that I like the best.

Schedule automatic tweets, Thankyou for following me message and much more! Be More Productive- Free signup… TweetLater.com

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Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –jschulmansr

Sorry, I missed everyone yesterday, it was a very interesting day making this one wonder if we are not seeing more hidden central bank selling in a desperate measure to hold Gold Prices down. Sooner or later the shorts will have to fill which I believe will happen somewhere around the $1050 – $1100 range giving a big pump up. Meanwhile today’s action, we are once again seeing continued downward pressure with Gold holding at the $890 to $900 range. Personally, I think we will hold here at the $880 to $900 level, build strength after the Gold coming on the market is absorbed. If we don’t hold here then $850 is the next very strong support level. We’re having a nice little upward correction in the stock markets and this may be the 20% retracement rally traders have been looking for. Mark my words we will soon here remarks like the “bottom is in place for stocks” and “now” is the time to get in at these low levels. After they sucker everyone in then we will see the Stock markets continue in their downward channel. In the meantime take advantage of this to load up on your Gold. Especially since we’ll hear the “double top” formation is in place comments and everyone will be giving up on Gold and Silver. I personally think we are forming a new pennant formation like the one that was formed around the $700- $750 level which then took off to $1000+. Based on that this formation should be the launch pad up to the $1250 level. I am aggressively buying Precious Metals Miners with current or about to come on line production, accumulating some more physical holdings and hanging tight. When I have confirmation I will be re-entering DGP for another ride to at least $1000. I will post when I enter that trade and if you are following me on Twitter you’ll be the first to know. Good Investing! -jschulmansr

A new site that is in pre-launch state that will become a virtual world – chat, shop, play, videos, etc. Anyways they are giving free shares (that should become actual company shares) to anyone who signs up and more shares if you refer people. Me2Everyone.com

Here you go- Bottom Calling For the Stock Market already!Barron’s Calls a Bottom – Seeking AlphaSure, stocks could slide much further — but they probably won’t. By most measures, they are downright cheap.

After blaming Obama for much of stock market woes (“The lousy economy is the main factor, but stocks haven’t been helped by Obama administration proposals … It doesn’t help that the Street is calling this an “Obama bear market” and that some investors are looking to “Obama-proof” their portfolios…), Barron’s concedes that the president did get at least one thing right: stocks are cheap for investors with patience.

Barron’s says its research bears that out. Here’s why:

Stocks are cheap relative to P/E – a Citigroup economist’s 2009 earnings estimate for S&P 500 components puts their collective P/E ratio at more than 13, which is where a bunch of bear markets bottomed – except 1974, ’82 and ’87 when P/E went as low as 8.5. If we get down to 10, S&P could fall another 25% to 500 and DJIA around 5,000. But that probably won’t happen, because in previous downturns Treasury yields were much higher, and because another Citigroup analyst says he’s seeing signs of panic.

Stocks are cheap relative to GDP – at 60% of the $14T GDP, stocks are their cheapest relative to economic output since the early ’90s. But they’re still well higher than the lows of about 30-35% seen in the ’70s and early ’80s. Stocks are also cheap relative to book value – about 1.3 down from a high of 5 during the dot-com bubble.

Stocks are cheap relative to gold – S&P 500 is now worth about 75% of the price of an ounce, vs. a peak of more than 5x in 2000. Over the past 40 years, the average stocks-to-gold ratio has been 1.6.

There’s also a lot of cash on the sidelines, Barron’s says, noting money-market funds now hold $4T – almost half of the market cap of U.S. stocks, and double the amount in money-market funds two years ago.

With Obama’s outrageous stimulus plans where the federal government is going to give out billions of dollars of handouts to the demand side of the economy, it’s no wonder gold is gaining ground while stocks have been falling. However, the question remains when is it time to buy? The answer is now. Gold has been consistently in an uptrend since October of last year. This is shown in the chart (click to enlarge) of a major gold ETF (GLD) [GLD:90.57,-1.72(-1.86%)] below. As you can see, gold is making a short short term pullback which signals a time to buy. With more talk of spending, including a world wide stimulus package, there is only further pressure on leading countries, currencies such as the U.S. dollar. These inflationary pressures may push gold to break the 2008 highs of around $1056.

But I’m not content just to park my money in physical gold and leave it at that. The trader in me wants to make a leveraged play to make the most off of gold’s bright future. Gold mining shares would seem an excellent play then. Not only do you get exposure to the gold market, but you get the benefits of stock ownership. In the past, whenever I would introduce the idea of owning gold as a form of investment, people would laugh my suggestion off because they just couldn’t imagine how anything would be better than owning “stocks for the long run.” Of course, they aren’t saying that anymore.

Gold mining shares are a nice compromise in terms of investment philosophy. If the American dollar does fall from grace as we goldbugs suggest, then owning shares of a gold mining company will be a tremendous boon. If the dollar continues to stubbornly hang on, and we somehow manage to resume normal economic growth, then I still own equities and should get the traditional benefits of equity appreciation.

The theory of owning gold mining equities is pretty easy, but the reality can be rather treacherous. Should you chose an established company with a lot of reserves or a junior company that mainly has a lot of promising prospects? One is more dependable and the other has the potential to be far more rewarding. It’s a similar discussion to blue chip versus tech stock debate we saw towards the end of last century.

For myself, I wanted an established company. Junior mining companies need a healthy amount of credit to develop their mining operations, and that wasn’t a chance I was prepared to take given the credit collapse of last year. That narrowed my focus down to just a couple of companies: Newmont Mining (NEM) and Barrick Gold (ABX). I chose Barrick because it was the largest mining operation in the world and because, at the time, it was trading at a lower PE ratio than Newmont. As of this writing, Newmont has held up better over the last twelve months as shown in the graph below.

The relative stock performance of the two companies

Really the two companies were performing in tandem until the last month or so. Then Barrick shares had a rather sudden loss of value. Part of this loss of value is probably related to the loss Barrick announced for its fourth quarter. The company was able to sell its gold at a good profit margin, despite the temporary fourth quarter fall in the price of gold, but the company also wrote off a large portion of the value of an oil company it had acquired in the prior year. Like so many decisions that turn out wrongly, it seemed like a good idea at the time. Oil is a significant cost in the mining of gold, so it would make sense to buy an oil company in a rising oil market as a hedge against an increase in the cost of mining. Oil’s subsequent fall caught even Warren Buffett by surprise.

Having to write off the value of an oil company due to a collapse in the oil market seems like a one time event. So let’s instead compare Barrick and Newmont on their forward PE ratios, rather than the past twelve months. Barrick closed yesterday trading at a forward Price-to-Earnings (PE) ratio of 15.71 compared to Newmont’s 16.43, which shows that you’re getting a discount for Barrick’s earnings over Newmont’s. The dividend ratio is even better: Barrick yields 1.4% compared to Newmont’s 1.0%. That’s 40% more money in your pocket for owning Barrick. Looking at these figures suggests Barrick is clearly the better company to own at these prices.

Going forward, it’s only a matter of time before the inflationary policies of the world’s central banks start forcing the gold price higher. However, Barrick will not perform well this year if we don’t see a return in the price of copper. There’s a significant amount of copper tied up in the gold ore that Barrick mines and in the past Barrick has been able to refine and sell it at a nice profit to held reduce the cost of its gold operations. For the year 2006-2008, Barrick was able to sell its copper at over $3 a pound and make a profit of over 50% on the sale. Yesterday copper closed around $1.65. If copper stays at that price the entire year, Barrick’s results will suffer. I’ve run a few simulations in a spreadsheet and here’s the numbers I get:

If gold averages the year at $950 an ounce and copper stays at $1.65 a pound, Barrick will earn $.94 a share.

If gold averages $1050 an ounce and copper stays at $1.65 a pound, Barrick will earn $1.78 a share.

If gold averages $950 an ounce and copper returns to $3 a pound, Barrick will earn $1.51 a share.

As you can see, the return of copper to its former levels is going to be just as significant to Barrick’s earnings as gold appreciating in value.

Since analysts estimate a 2009 EPS of $1.85, Barrick could suffer a significant down year if we don’t start to see copper return soon.

Looking beyond a year, I believe Barrick is positioned well. It is set to make money from an appreciation in copper, oil, or gold. That makes it a great place to be as we feel the effects of inflation, but in the short term gold bullion may represent a better investment.

Given the massive amount of money being pumped into the global economic system, higher prices down the road are a given. It’s possible that prices may fall in the short term, but no currency can withstand a determined onslaught by its own central bank and national government for long. I consider gold a no brainer in this environment. It’s a store of value that does well both in inflationary times and, as we saw last year, in deflationary times.

-Justin DiPietro

Disclaimer: None.

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My Note: See the nice little wedge we are forming in the above chart, a little patience and then bang! $1250 here we come! – jschulmansr

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –jschulmansr

Sorry for no post yesterday, was traveling. Just why did Gold Drop basically $100 oz after hitting the $1000 price level? Was it Mr. BooYah Jim Cramer giving his recommendation? That helped, but what was the real reason? Today’s articles give you the answer along with the reason Gold is heading right back. Gold closed over it’s 20 day moving average so 1st resistance gone, next big resistance around $980, then we are back to testing the all time high. I took this pullback as an opportunity to accumulate some more Mid-tier producers, two of my fav’s actually, (NAK) and (CDE). I chose (CDE) because everyone seems to have forgotten Silver and I personally think on a percentage basis will in the end bring greater returns than Gold. The other “forgotten metal is Platinum and (SWC) has been beat up so badly I couldn’t resist accumulating a little more. I will put out a special weekend edition so be on the lookout for that. You will be the first to know if you are following me on Twitter. Have a Great Weekend!- Good Investing! – jschulmansr

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A new site that is in pre-launch state that will become a virtual world – chat, shop, play, videos, etc. Anyways they are giving free shares (that should become actual company shares) to anyone who signs up and more shares if you refer people.

As veteran Café members know, it is my opinion the financial market press, who follow and comment on gold, rate at best mental midget status, as exhibited by this gold recap headline yesterday afternoon…

A few of The Muppets on CNBC have been pointed to the copper and oil charts as potential indicators that the economy might be about to show some life and that the market may be ready for a rally … from extremely oversold conditions. In particular, they are referring to their rounding bottom formations, which were followed today by breakouts, especially copper…

Then, this morning the DOW, S&P and the DOG were all called a fair amount higher on this news…

Stocks Rise Around the World; Commodities Gain, Treasuries Fall

March 4 (Bloomberg) — Stocks rose around the world, commodity prices rallied and Treasuries fell on speculation China will broaden efforts to boost growth in the world’s third-largest economy. The Shanghai Composite Index jumped the most in four months.

BHP Billiton Ltd. and Alcoa Inc. added more than 2 percent as copper and aluminum climbed on optimism metals consumption in China will increase. Aluminum Corp. of China Ltd. surged 9 percent as a former statistics chief said China’s Premier Wen Jiabao will announce a new stimulus package tomorrow. Volkswagen AG, the biggest overseas carmaker in China, gained 3.9 percent.

The MSCI World Index added 0.3 percent to 707.74 at 1:23 p.m. in London. The deepening global recession, a third government rescue for Citigroup Inc. and dividend cuts at companies from General Electric Co. to JPMorgan Chase & Co. have sent the of 23 developed countries to a 23 percent drop this year, the worst start since the gauge was created in 1970.

“The Chinese are about to come up with another huge fiscal push,” said Philip Manduca, who oversees $1 billion as head of investments at ECU Group in London. “They are going to pump an enormous amount of money in. This will help in the long term,” he said in a Bloomberg Television interview….

-END-

Perhaps coming Chinese economic stimulation is MORE than necessary as the true state of Chinese and Asian economic activity is not properly understood. The latest from my friend since 1980, Frank Veneroso…

Global Economy
Asian Black Hole Again
The Economic Collapse In Asia Points To A Deep Contraction In China

March 3, 2009

Executive Summary

1. The industrial collapse on a global scale has almost no precedent. Why has it happened?2. The history of economic cycles tells us that industrial collapses like this one tend to be associated with two industrial excesses: massively excessive accumulations of inventories and manias in fixed investments.

3. We have just gone through the biggest inflation adjusted commodity bubble in recorded world history both in terms of amplitude and duration. History tells us there was probably global goods hoarding; in other words, there may have been an inventory cycle of immense amplitude, much of it unrecorded, which is now being unwound violently.

4. If excessive inventory building and excessive fixed investment has been partly responsible for the amazing speed of decline in global industrial production, where in the world were these excesses concentrated?

5. China has embarked on a massive increase in its distribution chain. There was an associated massive inventory build in stores that remain void of shoppers. There may also have been a speculative accumulation of inventories.

6. China is also the economy where the world’s greatest fixed investment excess occurred. The ratio of fixed investment to GDP has been well above 40% for a half decade. No such investment excess ever occurred in any major economy since the onset of the industrial revolution.

7. We are now hearing stories about immense overcapacity in construction of all kinds.

8. Exports to China from China’s trading partners is all important, since it gives us some insight into the Chinese economy which the Chinese garbage statistics prevent us from seeing clearly.

9. Year over year exports for Japan have now fallen an amazing 46% in January. Exports to China fell at the same rate as overall exports, suggesting a contracting Chinese economy.

10. Japanese exports of capital goods to China have collapsed. German and Korean exports of capital goods to China have done the same. All this points to a sharp contraction in unsustainably high Chinese private fixed investment.

11. Taiwanese GDP fell an 8.36% rate in the fourth quarter non-annualized. I have never heard of an industrial contraction at such a devastating rate.

12. Exports were a cause. Taiwan’s exports fell at a 42.7% rate year over year in January. Exports to mainland China and Hong Kong fell at an even faster rate.

13. The odds are that Taiwanese firms operating in China have drastically curtailed their fixed investment on the mainland – another indication of a bust in unsustainable private business fixed investment in China.

***Neither commentary is mutually exclusive. If the Chinese go all out here because they are in such a mess, they will need a lot of oil and copper, etc. Better their people have shovels than guns.

This is a roundabout way to get into covering my field, gold and silver. Gold was bombed for 7 days in a row … from top to bottom $100+. Two weeks ago the world was falling apart and it was THE safe haven play. By yesterday the price drop had many of its advocates stumbling and the press was quickly ready to pan it as a GO TO investment.

This really is silly people stuff. Twenty to Thirty years from today people won’t believe the garbage reasons offered for gold doing what it does … emanating from the press and The Muppets. In a bigger picture sense it is equivalent to those who thought the world was flat some 500 years ago.

Gold is more a safe haven play than ever and the price is going to the moon, along with silver. The only reason we have seen and endured a stunning 10% drop in the price of gold in 7 days is because the US Government/Gold Cartel ordered the price down. Once they set the fall in motion, it led to normal technical selling by funds, as most follow money management/stop loss principles. The Gold Cartel has been feeding on these folks and the likes of momentum trader Dennis Gartman for the 10½ years The Café has been open.

Gold is now in its 9th year of making new highs; and still, many pundits and Muppets are questioning it as an investment because it has no yield. Another huh? Yep, and it has no counterparty risk either, nor has it lost 50% of its value like the DOW over the past 12 years.

There are so many dingbats out there who relate back to the 1980 gold high and say it has gone nowhere, or little to nowhere, which is more silly people stuff. Tell that to those who bought the DOW over the past 12 years, who are at best even, with most EVERYONE losing money, while gold has soared.

Silly, silly, silly.

On that note, veteran Café members will remember Neal Ryan (had not heard from him in 6 months or more) who spearheaded the Blanchard & Co. lawsuit against Barrick and JP Morgan. He just checked in with CP and me this morning. Forget the mental midget, Muppet gold commentary. This is the real deal and the main reason for gold’s $100+ price drop…

Gents,
hope all is well on your end. I must profess that I haven’t kept track of things in the metals markets much recently, but did some quick work for a friend who was looking to invest and asked about bank selling. Just an FYI since I was trying to explain to him why when central bank activity ramps up it’s the time to buy….Euro CB’s have dumped over 220 tonnes of gold on the market in the last 3 weeks…ie. they’ve met nearly half their yearly selling quota in 3 weeks. Hadn’t seen anybody mentioned anything like that in any news lately, though hadn’t been looking either. It’s always the interesting stuff that no one in the mainstream media seems to notice.

keep up the good fight!
Neal

Neal, who is so well connected and really knows his stuff, what? … the press getting to the gold truth? Explaining it to the bewildered public?

Oh well what fun!!! From MIDAS yesterday (referring to JB’s ECB selling numbers)…

“But the key point of the note is that this 38 tonnes of selling is dwarfed over a two month period by the 249 tonnes GLD has supposedly bought over the same period of time (see Adrian below). Hmmm.”

Which if Neal’s info is correct, means The Gold Cartel dumped 211 tonnes SURREPTITIOUSLY as part of their gold price suppression scheme and was THE real reason gold fell like it did. It all fits.

Oh, so many of the mainstream gold world folks is a bunch of shallow nincompoops!

CNBC’s Jim Cramer was jumping up and down about silver last night. It was quite a lengthy segment on silver. However, as bullish as he was, he said that gold and silver were going DOWN first, so buyers should scale in at intervals on the downside. Silver popped early to $13.17 but gradually fell apart, while gold was smothered for no apparent reason again, except for The Gold Cartel’s reasons. Gold roared early up to $922.30, then was nailed by the bums to $905 before stabilizing. We have witnessed this pattern (the cabal slams gold after an early burst) over and during the past (now) 8 days of successive losses. Perhaps we have a double bottom above $900. With so many buyers lurking out there between $880 and $900, that would not be a surprise. Then again, there is a horrendous US jobs report coming on Friday and gold is always nailed around that report. Perhaps that was part of what this takedown was all about and the major damage has been done already.

Silver was aided in the morning by the VERY firm copper and oil prices. The hoopla over the Chinese stimulus comments didn’t hurt either.

The gold open interest only fell 2,071 contracts to 365,271 (not much liquidation there), while the silver OI went up a slight 15 contracts to 93,051.

The yield on the 10 yr T note is 3%. The dollar fell .73 to 88.57. The dollar/gold relationship has taken on an entirely new dimension for the time being.The CRB came back from the dead, gaining 7.78 to 211.45.

AM gold goodies from John Brimelow…

Indian ex-duty premiums: AM (S15.63) PM ($8.79) with world gold at $913.58 and $911.80. Basis Delhi – well below legal import point. After a soft start, the rupee managed a rally at last, closing at $1 = R51.35 (Tuesday R51.95). This had a notable effect on the PM premium situation. The stock market also managed an up day. Closing 0.23% above Tuesday.

A rally in the rupee could have an important influence on world gold at this point.

In a somewhat confusing development, The Gartman Letter today speaks of cutting another unit of gold from its model portfolio, by my reckoning eliminating its position. But the portfolio summary reflects neither today’s nor yesterday’s action.

Nevertheless, the attitude towards gold now held by this well-informed and influential commentary is clearly unenthusiastic.

Of interest is that MarketVane’s Bullish Consensus for the S&P, which is normally very sticky, slipped a point last night to 32%.. In the past couple of years it has been lower only 3 days, October 8-10 last year, when it bottomed at 29% (and then saw a 10 point rally. On some reckonings (Hays), that remains the “internal low” of the market.

Since very recently selling in gold appears to have been linked to stock market weakness, this could be important to gold’s friends.

And here it is…Tuesday’s deep $34 intraday Comex sell-off and down $26.40 loss (2.8%) saw only a minor fall in open interest. Only 2,071 lots were shed (0.6%). In the first instance this implies there continues to be a substantial short interest in the market, and that the widely reported long-liquidation is exaggerated, at least as far as Comex is concerned.

Today a promising early Comex rally was reversed on heavy volume – by 10am 62% of the day’s estimated volume had traded and gold was $10 off its high. Gold then drifted down to a floor close loss of $6.90. Only 99,266 lots were estimated to have traded – switch effect 8,734.

A great deal of attention is now being paid to the slack Asian demand/scrap reflux situation with wider discounts on kilo bar being reported, especially in the Far East (50c HK, 75c Tokyo). See

On the other hand, a survey of US coin and bullion dealer sites this afternoon suggests that US premiums have widened slightly, and remain very high.

MarketVane’s Bullish Consensus for gold slipped a point to 74%.

The GLD ETF achieved a fifth day running with reported gold holdings static at 1,029.29 tonnes.

While this is the 8th down day in a row for Comex gold, the bears cannot be said to have really pressed their advantage, with volume fading away once the early rally attempt was blocked. Neither the HUI (down 0.94%) nor the XAU (up 0 02%) lost their curious gains of yesterday. Some will see the apparent exit of The Gartman Letter as a positive sign.

The market remains interesting.

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Now we know Gold has come roaring back but I couldn’t agree more “Very Interesting”!-Jschulmansr

Gold has history on its side. It is a proven way to preserve one’s wealth over time. It acts like an insurance and it is highly unlikely mankind’s behavior during the last 6,000 years is going to change anytime soon. Some things never change. Two of those things are human nature and gold’s capacity to preserve one’s purchasing power.

That said gold has recently reached new highs in various foreign currencies. The chart of gold in Euro terms tells the story of what is to come. Don’t take this lightly. This is an important event as new highs typically attract more buying. If the Europeans start allocating more funds to physical bullion demand will increase drastically and gobble up supply. It is reasonable to expect additional upward pressure for the price of gold. Physical accumulation is accelerating on a worldwide basis. Keep in mind gold is a very tiny market compared to the equities market. A change in asset allocation resulting in a small increase to bullion exposure could easily double worldwide demand for gold bullion investment purposes.

A story hitting the wires recently is that: Greenlight Capital’s founder, David Einhorn, is finally taking his grandfather’s advice. The $5.1 billion hedge fund is buying gold for the first time amid the threat of inflation from increased government spending. Einhorn fund’s recent decision to invest in physical gold bullion is testament to increased awareness of gold’s bullish long term trend and it looks like this is only the beginning to added buying pressure for gold bullion.’ For full coverage of the story click here.

It looks like the price of gold in US Dollar terms is merely lagging other currencies as the US Dollar has been very strong lately. It is still early to draw conclusions as the US Dollar could stay stronger than most people expect but the new accelerating trend channel looks to be a valid one.

So what it all comes down to is that worldwide accumulation of physical gold is accelerating. Hence the odds the gold price is going to accelerate as well are rather high.

If you haven’t built a physical bullion position yet now is a good time to think about doing so. I typically recommend holding at least 5% of one’s liquid net worth in gold bullion held in your own possession. Increasing that percentage up to 20% isn’t that bad an idea either. Although the markets look like they might want to stage some kind of rally right now taking a longer term perspective indicates the gold trend is going to make you more money than buying the S&P500 via the SPY.

Gold should reach new highs in US Dollar terms soon following the lead of foreign currencies like the Euro, the Canadian Dollar, the Australian Dollar, the Swiss Franc and the British Pound Sterling to name a few. As long as the lower trend line of the new dotted trend channel is not breached ‘the trend is your friend’ and you should hold on to your gold bullion position. You could use that level to protect your position with a stop loss.

If you want to be more aggressive you should consider buying silver bullion. The silver market is much smaller than the gold market so the market is considered to be a riskier one. But once the public is going to stress silver’s monetary significance as opposed to viewing it simply as another commodity silver prices will increase significantly and should ultimately outperform gold. I recommend closely watching the gold – silver ratio for clues. Historically the ratio has showed to be lower than the actual one. Watch for the ratio to go back to the 55 level and overshooting to the downside as soon as silver garners more interest.

You can easily keep track of the three charts and how they evolve over time by visiting my public list.

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My Note: Remember even with the $100 oz drop Gold came nowhere close to breaking out of even it’s upward accelerated channel! Patience my friends!

Successful entrepreneur turned bullion dealer Greg McCoach brings more than 20 years of business experience, a vast network of mining contacts and his unique precious metals industry insights to the mining investment newsletter he launched in 2001, The Mining Speculator. In this exclusive interview with The Gold Report, Greg outlines the ‘new’ criteria for junior miners, explains why he favors the juniors over more senior producers and advises a combination of both physical metal and stocks for investors to protect themselves in today’s market.

The Gold Report (TGR): In your January newsletter, there’s a table that shows how the HUI Gold BUGS Index over 10 years was the top asset class. Can you talk about gold as the top asset class compared to these others?

Greg McCoach (GM): We see by the statistics that the HUI Index, which is a measure of gold and silver precious metal stocks, has performed better than any other asset class in the past 10 years. Now what’s interesting is that we’re still in the process of watching this gold bull unfold. In terms of the four stages of a bull market, we are probably past the midway point and heading into the latter stages. This is where the parabolic moves in the precious metals will start to happen. And with all that is unfolding in the world economic scene, it’s not difficult to see why gold will soon be soaring.

TGR: So you definitely think this bodes well for the next phase of the gold bull market; there will be a parabolic move?

GM: Yes. This is where you’re going to see gold really go to levels that people can’t even comprehend. Up to this point, gold has been a surprise to many in the mainstream media. What investors need to understand about the bull market in gold thus far is that the numbers that we’re dealing with, $960 an ounce gold right now, is nowhere near the 1980 high in gold of $875 an ounce.

You have to inflation-adjust those 1980 numbers for 28 years of true inflation. If you did that, the $875 high in gold would have to be $6,500 an ounce in inflation-adjusted terms. For silver, it’d be $400 dollars an ounce. So when you see silver at its current rate of $14 an ounce and gold at $960 an ounce, in real inflation-adjusted terms, those prices are still dirt cheap, relatively speaking, compared to where they’re going to be going.

As we see the world financial system continue to unravel, the dollar along with all fiat currencies will just implode leaving gold as the currency of last resort. Gold, and silver will go into the stratosphere as this happens. People need to remember that what took gold and silver to their all-time highs in 1980 pales in comparison to what we are dealing with now. The world has never witnessed the likes of the financial destruction that is now underway. It is truly frightening.

TGR: You say in your “Greg’s Crystal Ball” section that you think the mania phase is going to start happening sometime next year, in 2010.

GM: I think by the end of this year things are going to be so bad worldwide that gold is going to become headline news and that will become the driving force towards the parabolic moves. What’s happening right now is that the big money is still playing the paper game of musical chairs. “Paper musical chairs,” I call it. When the music stops, people run from one chair to the other chair looking for safety. They run from bonds to dollars to Euros, etc., trying to find the safest place. But they’re not finding it. Why? Because the paper system as we’ve known it is unraveling. So people are trying to chase safety. Well, they can’t find it because it doesn’t exist. They go into dollars, and they feel comfortable there for a little while; then suddenly the dollar tanks again, and then they run out of the dollar to another paper currency.

Ultimately, when the music stops, they’re not going to run to a chair; they’re going to run for the exits. When that happens, they’re going to discover the asset class known as gold. That’s when these parabolic moves are going to happen. As that happens of course, the select precious metal mining stocks will move up accordingly. The leverage investors can get will be phenomenal during such a scenario.

TGR: You say the key is to own the physical metal, as well as the stocks. What do you recommend as far as percentages in a portfolio?

GM: Right now my personal portfolio is 25% cash, 25% physical metals. I take physical delivery of gold and silver. I have 35% in select precious mining stocks, junior mining stocks mostly, and then the balance is in Canadian oil and gas trusts that pay a monthly dividend check.

TGR: You favor the juniors over the more senior producers simply because of the growth potential?

GM: Yes. The leverage is better. For me, personally, I’m willing to take the extra risk with the juniors because I feel like I know what I’m doing and I’m confident about it, so I feel comfortable in being able to identify the juniors that are going to perform very well. The seniors will do well, but they won’t do as well on a percentage basis. In other words, there’s not as much leverage with the seniors as there is with the quality juniors. But the big problem for the average investor is trying to understand what a quality junior is. There’s so many of these companies out there, 80% of which are nothing but moose pasture, and it’s very difficult to sort through all the promotions and scams to find the real jewels. That’s my job as a newsletter writer; that’s what I do. I travel the world trying to sort through all the garbage to find the real opportunities that can deliver the big returns.

TGR: What do you see right now with the juniors? Some of them definitely are climbing back up.

GM: I think it’s nice to see them recover a little bit. This is a very good learning situation for investors of mining stocks. Look at the companies that are rebounding. If we have another implosion, which companies do you want to buy? The ones that rebounded the quickest and the most in the past several weeks, months.

Since the bottom in late November, early December, we’ve had companies that have doubled, tripled, and even quadrupled if you had enough courage, or any cash, to buy back then. But there are other companies that haven’t moved at all, and they’re just stuck in the mud. So, obviously, you have been given a great opportunity to see the companies that are more quality oriented, that have the value, that have what the market is looking for, and those companies are the ones you want to really pay attention to.

Since a lot of the stocks on our list bottomed out, the top 10 list, in particular, has had some of the stocks do quite well. Some of them have doubled, tripled, and have bounced back quite nicely from the bottom. Unfortunately, most of us probably bought at a higher level and so we’re not even up to the point where we’re at break-even again. Obviously, we’re still waiting for higher levels.

Now what I’ve been saying is that, unfortunately, with the severity of the world economic events, up to this point our mining shares have been sucked down the drain, so to speak, when world stock markets sell off. Every day that the world stock markets have had a bad day, the mining stocks have had a bad day as well. What we’re looking for is the precious metal prices to help us disconnect from that activity. It hasn’t happened yet. I’m still worried that the next downturn in the world markets could affect our junior mining stocks again. I’ve been looking for this key disconnect moment, where the precious metal prices take us into another realm and help protect and insulate our select junior mining stocks. You have to use ‘select’ because so many of the juniors are going nowhere. It’s only the select companies that are going to be protected or insulated from other market activity that’s going in the wrong direction. So I’m looking for that moment our quality junior stocks start to move on their own accord.

TGR: Can you give us an overview of what you consider a select company? What is the criteria?

GM: The criteria is this. They have to exceptional management. In other words, out of all the management teams that exist out there, there’s probably only a small handful that really have the quality background and experience to do what they say they’re going to do. Most of these other people are just managers or lawyers who don’t have experience or are hoping to get involved with a hot sector. They’re highly promotional, and most often are only looking out for themselves.

So you look for the people that have the right resumes, the ones who have worked for the majors for 10, 15, 20 years or more and have the experience (paid their dues so to speak), learned the business, understand what they’re doing and what they are trying to accomplish. Do they have experience in doing this specific task such as find gold? Did they mine gold or silver before? If they were mining for uranium their whole career and they jump into gold, well, that doesn’t sound too good to me.

So you have to have the experience and the knowledge base. That’s key. The way we’ve been playing this market the last eight years is no longer as valid as it once was. We need to adjust to the new rules on how to play this game and win.

What the market is looking for is very specific. If you make a good gold discovery, it has to be in an existing mining camp. It has to be in an area where the development costs aren’t very large. If you make a big gold discovery, and it’s in an area that’s out in the middle of nowhere, the development costs are going to be too high. No one’s going to fund it; no one’s going to finance a project like this with the new market environment. It doesn’t matter how good the results are.

So you have to find these discoveries in good jurisdictions that have short permitting times that have existing infrastructure. If it doesn’t have those things, forget about it. There are plenty of great discoveries that I know of. They’re just in the wrong area. Some examples would be Romios Gold Resources Inc. (TSX.V:RG), Copper Fox Metals Inc. (TSX:CUU), who have tremendous discoveries but are unfortunately in the wrong area. It takes too much money to develop such a desolate area as we have seen with NovaGold Resources Inc. (TSX:NG) (AMEX:NG) in their effort to get the Galore Creek deposit in production. The cost overruns were so enormous, they had to shut the whole thing down. Well, the market’s not interested in those kind of projects anymore. I choose to invest in areas that have what the market wants.

Look in the areas that have plenty of existing mines and infrastructure. This is where plenty of experienced mining people already live and juniors who can make a discovery will most likely be bought out by a major who is in the area.

Now certain jurisdictions are better than others. The political risk now is more intense than it was. Political risk is always a big factor, but the political risk now is just amazing, so you have to be very careful where you’re willing to invest your money. For me, I’m getting to the point where there are only a few jurisdictions that I’m willing to look at. Certain parts of Canada where there’s existing mining camps, certain parts in the United States, and Mexico which still looks very good. That’s about it. Everything else is no longer as attractive as it once used to be.

We’re also looking for higher-grade resources vs. lower grade. We’re looking for low-cost development situations vs. high-cost development situations. We’re looking for economic deposits that can be financed.

Here’s another situation—within mining, the different kinds of discoveries. A large copper-gold porphyry system is known to house large amounts of gold and silver,; but, unfortunately, it’s also known to have very high development costs. Who’s going to finance that? I’m not as interested in those kinds of stories as I once was. You’re better off looking for the higher grade— “epithermal”—smaller vein, higher grade, near-surface deposits that will have an easier time of actually going the whole distance and getting into production.

GM: Since they bottomed, Pediment has more than doubled. They’re hanging around the dollar trading range, which some people have been disappointed with. But what I say is, look, Gary Freeman, the CEO, is just weighing his options right now. He’s not making much in the way of news. That’s okay. He’s lying low, he’s looking at his options right now, and this is a company that is about to release a new 43-101 that will have more than 2 million ounces of gold in the ground. This is a verified situation. That’s a significant number because once a company, a junior, crosses the 2 million ounce gold mark, it gets on the radar screens of the majors.

Gary has a lot of things he’s weighing out. After the market meltdown, he decided to reduce costs, get things trimmed down, and get the burn rate really low to conserve cash. So, in the last few months there has not been much in the way of news. The company is lying low for now, but I think you’re going to see that change as PEZ announces their new 43-101 resource calculation. At that point I think you’re going to see Pediment start to have a lot of news flow, which should be very good for the share price.

He’s got the Baja property we just talked about that’s going to have the new 43-101. I don’t see how it’s not at least 2 million ounces based on my back-of-the-envelope calculations, but you never know with these things until they actually come out. I would guess it’s going to be over 2 million and there’s plenty more to be discovered there In my opinion, this deposit could be greater than 3 million ounces before all is said and done. Well, that’s a major discovery. It’s in the right jurisdiction, with very low development costs and it’s in an existing mining area, so it should do very well.

Now, Pediment also has a project called La Colorada that could be a near-term producer. It’s the old open pit that El Dorado Gold Corporation (ELD.TO) (AMEX:EGO) produced from, which really made El Dorado Gold what they are today—what launched them—that discovery and putting it into production. Pediment now controls it and other people are interested in it. Should Gary vend it out to somebody else, take the cash and run, or should he develop it himself? He has lots of options. He has lots of cash. He has lots of great properties. Gary has many different things he can consider at this point, so I think he wisely just stepped back, started to look through everything that he has and what options are available. We’ll see what happens but the prospects for the company look very good..

I’m sure there’s been interest by majors already on the Baja Project. He’s probably gotten plenty of calls, where the majors are already saying, “hey, look, what if we just take you out at this price?” Is it high enough? Is it worth taking the money now and running, letting somebody else deal with it? Or is it better for the company to go down the road a little bit further, develop it themselves in the hopes of getting a much higher price later on? These are things we all have to weigh out. Is it better for us as shareholders to take the money and run right now, even though we might get a lower price for it? Or should we wait a little bit longer, and get a higher price when they develop it? These are things we have to look at. So, with that being said, in my opinion, as we see these higher gold prices and with the news that’s about to come out, I think Pediment’s a two dollar stock in the next six to eight weeks.

GM: Yes, and as Capital Gold runs up to the 90 cent level—it was recently in the 80 cent range—as it gets close to 90 cents Canadian, I’m telling people to start selling, start taking some profit. What’s going to happen is the company is going to do a reverse stock split, which is going to be a minimum 4:1 stock split. These stock splits are always negative for current shareholders. Let’s just say they decide to do the reverse split at a dollar. They’ll reduce their outstanding shares by 75% and the stock would be at four dollars at that point, which would get them their AMEX listing (which is a good thing), and that’s why they want to do it. But, typically, what happens, after they do a reverse split, the stock gets hammered. The four dollar share price gets leveled and it usually retracts to a level that is very damaging to current shareholders. So this is why I’m saying take some profit as Capital Gold gets over 90 cents, hold the cash.

I think Capital Gold is worth holding in the portfolio, but wait ‘til after the reverse split and the detrimental effects that reverse splits typically have on share prices. Wait for the share price to retract, and then buy in again because I think Capital Gold will be a good company to hold. I just think you should take some profits at this point.

GM: Silvercrest is a great story. Their production scenario at Santa Elena in Mexico is a high-grade silver-gold kind of scenario. They just came out with their resource update. The resource is growing and the project should be in production by the end of 2009. Things are looking very good so I’m going to keep the company in my portfolio. This resource should grow with time. It’s got all the things that the market’s looking for—precious metals-oriented in Mexico, near-term production and the company should have cash flow.

GM: Yes, they made their entry into the top 10 because they have shown me that they know how to manage the prospect generator model with success. The CEO, whom I like very much, really watches and guards the treasury and watches out for shareholders. He’s managing his properties very well, and I think he’s got not just one but possibly multiple discoveries. And this is what you want with a junior exploration stock. Some people say, “Greg, don’t you want to have people who have a production cash flow?” Yes. We’re going to have some of those in the portfolio, but the exploration companies—the good ones that can make the discoveries—is where you get the biggest leverage of all. And I think Riverside is in that category. So they are now number nine on our top 10. I like them very much and I think it’s a good play.

GM: Allied Nevada is a good story because they’re getting the Hycroft mine back into production. It’s going very, very well. The stock price has rebounded very nicely, and I think it’s probably poised to make a new high. Now we saw some selling pressure, some people were taking profits in January and early February as the stock was recovering; but now I think that selling pressure is gone and the stock is back up over the $6 level again. With higher gold and silver prices, I think you’re going to see Allied make a new all-time high and I wouldn’t be surprised to see the stock at $7 or $8. So there could be a profit opportunity on that one coming up here.

GM: Yes, I like Vista Gold. Allied Nevada and Vista used to be one company before they did the split. The better properties I thought went with Allied Nevada, but Vista Gold still has plenty of good situations. Their model of acquiring cheap gold ounces in the ground, increasing the value of them in a market where gold prices are going higher, is a very valid market. They have a good share structure, they have cash in the bank, and they’re a very well-managed company with top management talent. So, with higher gold prices, that model should do very, very well.

They’ve got multiple projects with big gold deposits in Australia at the Mt. Todd deposit, which is a 6 million ounce gold resource. They’ve got the Awak Mas property in Indonesia that is a very large holding of gold. And higher gold prices make these kinds of projects worth more and more. They’ve also got some great projects in Mexico next to Pediment’s project on the Baja. They have the Paredones Amarillos Project, which is kind of waiting on a permit situation that they thought was already done years ago that seems to have had a little glitch there, but that’ll get worked out. And they’ve got some other good projects in Idaho and one other one (I can’t think of it off the top of my head), but it’s a good scenario and that model should work well. If you believe in higher gold prices, Vista Gold should do very well.

TGR: Greg, this has been great. We appreciate your time.

Greg McCoach is an entrepreneur who has successfully started and run several businesses the past 22 years. For the last eight of these years he has been involved with the precious metals industry as a bullion dealer, investor, and newsletter writer (Mining Speculator). Greg is also the President of AmeriGold, a gold bullion dealer.

Greg’s years of business experience and extensive personal contacts in the mining industry provide unique insights that have generated an impressive track record for The Mining Speculator since its inception in 2001. He also writes a weekly column for Gold World.

Want to read more exclusive Gold Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Expert Insights page.

A new site that is in pre-launch state that will become a virtual world – chat, shop, play, videos, etc. Anyways they are giving free shares (that should become actual company shares) to anyone who signs up and more shares if you refer people.

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –jschulmansr

I had mentioned in a previous posts (here and here), that I am somewhat of a contrarian and get nervous when everyone is shouting Buy! from the rooftops. BooYah! it happened, Jim Cramer touted Gold as a buy and BANG! Gold dropped faster than a lead balloon. Go figure… As for my outlook on Gold it is still long term bullish. You should be taking this breather to accumulate more of the Gold producers, especially Mid-Tier and the Juniors. They are still selling at very attractive levels. Gold I feel is building a nice base here at the $900 level. If $880 level is broken then we’ll go directly to $850 potentially as low as $800. However that said, I think realistically we are going to see some more base building at this level and then launch for a test of the $1033 all time high within the next month to month and a half on normal market action. However since normal is not normal any more, adjust your positions and get ready for the next launch, the countdown has begun…-Good Investing! jschulmansr

“Nothing will unnerve the paper gold shorts more quickly and do more to undercut their confidence than to strip them of the real metal and force them to come up with more hard gold bullion to make good on deliveries. “Stand and Deliver or Go Home” should be the rallying cry of the gold longs to the paper gold shorts.” –Trader Dan Norcini

Gold fell $8.25 to $905.80 in early London trade before it rose as much as $8.70 to $922.75 in early New York trade, but it then fell back off into the close and ended near its new session low of $904.80 with a loss of 0.79%.Silver dropped $0.05 to $12.66 in Asia before it rose to see a gain of 2.7% or $0.34 at $13.15 at about 9AM EST in New York, but it also fell back off into the close and ended with a gain of just 1.1%.

Euro gold fell to about €719, platinum gained $15 to $1041, and copper gained roughly 9 cents more to about $1.69.

Gold and silver equities rose roughly 3% at the open before they fell back off to see about 2% losses by a little after 2PM EST, but they then rallied back higher in the last two hours of trade and ended mixed and near unchanged.

The Economy:

Report

For

Reading

Expected

Previous

ADP Employment

Feb

-697K

-630K

-522K

ISM Services

Feb

41.6

41.0

42.9

“The Obama administration kicked off a new program Wednesday that’s designed to help up to 9 million borrowers stay in their homes through refinanced mortgages or loans that are modified to lower monthly payments.”

The fed’s Beige Book showed that the fed is not expecting an upturn in the economy until late 2009 or early 2010.

The U.S. dollar index fell as the euro rose ahead of tomorrow’s ECB and BOE meetings that are expected to see cuts of 50 basis points each.All eyes and ears will be on Trichet’s speech following the expected cuts as it may indicate a possible change in policy heading forward.

Treasuries fell as the Dow and S&P rebounded from yesterday’s 12-year closing lows “on word of a possible Chinese economic stimulus package and an Obama administration plan to help struggling homeowners.”

Among the big names making news in the market today were GE, Costco, BJ’s, Toll Brothers, Liz Claiborne, Exxon, and SunTrust.

The Commentary:

“Dear CIGAs,

Gold’s job is, and will always attempt to during periods of monetary stress, balance the INTERNATIONAL Balance Sheet of the USA.

In the early 70s I put an advertisement in Barrons predicting gold would rise to $900. When it got near that level, I left for 21 years.

I reappeared officially when Forbes published an article on my career December 10th of 2001. Click here to view the Forbes article…

The mathematics behind the $900 number came from the following equation plus reasonable trend estimates on the number going into the future.

You will note the number today fits in nicely with Alf’s high levels.

Major ONE up from $256 to $1,015 (actually 4 times the $255 low);

Major TWO down from $1015 to $699, say $700 (a decline of 31%);

Major THREE up from $700 to $3,500 (a Fibonacci 5 times the $500 low);

Major FOUR down from $3,500 to $2,500 (a 29% decline);

Major FIVE up from $2,500 to $10,000 (also a 4 fold increase, same as ONE)

I would not have revealed this unless a recognized expert who has a 100% track record such as Alf Fields predicted it first.

I did not wish to yell “fire in the theatre.”

It certainly make the Comex manipulators, who could easily be stopped, look long-term silly today.”– Jim Sinclair, JSMineset.com

“Dear CIGAs,

General long liquidation and some fresh short selling continues to occur in the paper gold market at the Comex as short term oriented traders express disappointment in the lack of a reported increase in holdings in the gold ETF, GLD. Gold is still probing for a low from which to base. See the chart for some comments on the various technical levels where that might be found.

Gold moved inversely to the equity markets today as stock prices moved higher in a bit of a relief rally after being down for 5 straight days in a row. Chatter was that China was on the verge of an economic recovery and what is therefore good for China is good for the entire global economy. The surge in copper prices today after yesterday’s strong move higher also fed into that theory. What those espousing the “copper theory” do not understand apparently is arbitrage. Copper prices in Shanghai and London were and are trading at two different price levels and arbitragers are taking advantage of that price discrepancy. That has copper flowing to China and drawing down supplies in London which is being interpreted as signs that China is going to recover first. My view is that once arbitrage corrects the price discrepancy and the Chinese are finished restocking at bargain prices, the drawdown in LME copper stocks will come to an abrupt halt. China is certainly planning on using some of that copper with its own economic stimulus plan but one has to wonder if that sort of thing is going to produce lasting economic gains seeing that part of the problems in China are excessive production and supply capacity. I guess we will find out…”– Dan Norcini, More at JSMineset.com

“April Gold closed down 6.9 at 906.7. This was 1.2 up from the low and 16.3 off the high.

March Silver finished up 0.205 at 12.9, equal to the high and equal to the low.

The gold market clearly was undermined by several developments that seemed to deflate the flight to quality angle in the marketplace. Clearly the Chinese stimulus news was a major catalyst behind an improvement in macro economic sentiment and that in conjunction with what appeared to be a key reversal in the Dollar seemed to turn up the long liquidation pressure on the gold market. It is also possible that additional US government offerings served to tamp down fears that the US wasn’t in control of its future, as the idea that things were about to get out of control was certainly part of the reason gold prices recently managed to rise above $1,000. While anxiety might not stay tamped down, the gold market on Wednesday certainly seemed to be fearful of that happening in the near term.

The silver market clearly diverged with the gold market and that seemed to be the result of silver tracking its physical commodity factors, while the gold market was seeing financially orientated long liquidation pressure. With the copper market adding almost 10 cents per pound today and up 20 cents from this week’s lows, it was clear that interest in industrial metals was serving to lift the fortunes of silver. Certainly the Chinese stimulus package was a large source of support for silver but in retrospect the strength in the equity market had to give some silver buyers an incentive.”– The Hightower Report,Futures Analysis and Forecasting